Sunday, March 16, 2014


Nigeria Oil Minister: Diezani Alison-Madueke
Presidential spokesman Rueben Abati has revealed  that in keeping with its avowed commitment to full transparency, openness and accountability in governmental affairs, the Federal Government had authorized the engagement of reputable international firms for the recommended forensic audit of NNPC accounts. 

The mismanagement in the Nigeria oil industry as led to citizens on Nigeria main streets taking matters in their own hands and taking care of themselves the best way they can through 'bunkering' and other financial criminal activities.  When we have such gross mismanagement where ordinary citizens could hardly afford simple subsistence, then the laws of nature kick in.  The survival instincts in man will do whatever it takes to maintain self sustainability regardless of the political or legal regulations.  This mismanagement in the oil sector is a spillover of many years of dictatorships that witnessed unaccountability on a massive scale on the part of the successive administrations.  The heartless opulence of the few and the powerful led to the lawlessness on the main streets.  Logically the natural resources belong to the masses. The years of dictatorships including the last 8 years of Obasanjo's administration resulted in the humongous corruption and mismanagement, and they should be held responsible for everything that is wrong in the Nigeria oil industry. There is no better time but now to commence the overhaul of the management and the accounting system in the Nigeria oil industry. The continued decline in oil revenue and remittance to the Nigeria Treasury as a result of the mismanagement and theft will inevitably bankrupt the Nigeria economy.  A bankrupt nation is a product of morally bankrupt policy-makers and an indictment of their incompetence.
As reported by the  Nigeria is the second largest economy in Africa, second to South Africa. Nigeria oil theft is costing as much as $8 billion a year.  An average of 100,000 barrels a day (b/d) were stolen in the first quarter of last year. Politicians, security forces, militants, oil-industry staff, oil traders and members of the local communities all profit from 'bunkering' of oil, so few have interest in stopping it.  With so many feeding from the trough, it is doubtful if anyone in Nigeria has the political will to stop it. Profits are laundered abroad in financial hubs, including New York, London, Geneva and Singapore.
Nigeria oil murky Business
Money is smuggled in cash via middlemen and deposited in shell companies and tax havens.  Bank officials are bribed.  Cash is laundered through legitimate businesses. Some of the proceeds and stolen oil, end up in the Balkans, Brazil, China, Indonesia, Singapore, Thailand, the United States and other parts of West Africa.

The swift response by this administration to the calls for this audit is welcomed.

Our suggestions:
  • At Center for Modern Nigeria, we will like the audit to extend to the Obasanjo's presidency and beyond.  We will like this audit to be time specific and short and the auditors' reports and findings made public.
  • To eliminate any shadow of influence and or impression of obstruction during these investigations, the Minister for Petroleum and associates in the industry must step aside on paid leave of absence until these investigations are over.
  • Anyone found wanting including ex-dictators, after these investigations must be sanctioned to the fullest extent of the law.
  • When all these investigations are over, we want to see a comprehensive systemic overhaul of the Nigeria oil industry management with an Independent External oversight that monitors the accounting system at least quarterly.
  • All licenses for oil businesses in Nigeria issued to any ex-Dictator and associates must be revoked immediately.
  • The Nigerian Navy and Customs must step up surveillance to checkmate 'bunkering' and theft.
  • Certain percentages (at least 10%) of oil revenues should be reinvested on the infrastructural developments in the oil producing states.
  • Oil pollution or spillages must be prevented as much as possible and cleaning completed as soon as there are incidents. 
  • Robust penalties must be levied on oil companies responsible for environmental degradation through oil spillages.
Again, these investigations should be time-limited and short and the reports made public.

By ordering these investigations, this administration has proven itself beyond a shadow of doubt to be on the side of the masses and its commitment at the rectifications of missteps of years of dictatorships.

These investigations are steps by this administration to demonstrate its commitment to transparency and accountability.

This administration has proven itself again and again that it is the peoples' government.

At Center for Modern Nigeria, we commend this administration for its sensitivity and its transparency.

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