The Oily Affairs of a Profligate Nation by Demo Adewusi

I have read and watched several arguments pervading the public domain since the announcement of the removal of the fuel subsidy. I have been very circumspect in pitching my tent during these turbulent times. However, it is clear that all Nigerians are justifiably angry. By Nigerians I refer to the majority of people who have their own hands in their own pockets! 

Despite the fervent uproar that heralded this unpopular government policy, some things have been achieved. What amazes me is the speed at which these two things have been achieved:

First, the truth is coming out concerning the mono-trade that props-up our nation. Veiled behind contrasting facts, figures and extrapolations is the truth. More people have come out with their own versions of the real reason why Nigeria needs to stop a subsidy that should not have existed in the first instance.

Second is that Nigerians have become more perceptive at seeing the big lie that has been sold to them for the past fifty years. 

The government has been a big lie, its policies a poignant reminder of the wickedness of man to man and its appetite for waste compares only to Usain Bolt’s abilities to break his own world records over and over again. Subsequent Nigerian governments have elevated corruption and wasteful spending to a new art form. No stable nation competes with us in this genre, we are record breakers.

Let us briefly examine the origins of the fuel subsidy, and the carnage of catastrophy that has followed. We discovered oil in the southern part of Nigeria and sited refineries in Warri, Port Harcourt and Kaduna. In typical Nigerian style, our refineries were left to deteriorate while turn around maintenance contracts were constantly awarded to incompetent firms. Miraculously, our leaders also forgot to build additional refineries to cater for the burgeoning population. Our three refineries were built when Nigeria’s population was about eighty million people. While we doubled in size, our leaders were more focused on lining their own pockets than planning for a growing population.

As far back as the Babangida years, Nigeria had been experiencing shortfalls between internally refined petroleum products and actual demand for petroleum products. Professor Tam David West managed the challenge by exchanging crude oil for finished products. He devised a system where countries were paid in crude oil for refining petroleum products, ensuring that nobody made money from the situation.

This problem of lack of internal capacity to refine crude oil is perennial, just that the politicians took over and devised a clever way of making money from their own incompetence.

The politicians created a class of super rich Nigerians who became cohorts in funding elections and perpetuating corrupt people in government. How else can you explain the fact that everyone who has donated two hundred million naira to the presidential campaign fund in the past two elections are all major players in the oil sector? How would they be paid back? SUBSIDY! 

People like Aliko Dangote, Femi Otedola and Wale Tinubu all became purse keepers and financiers for the politicians, empowered and capable to provide cash for political conquest. Some of them barely existed ten years ago! The politicians neglected the refineries, did not build new ones and created the elaborate scheme of phantom subsidy in order to solve their own problems, not ours!

Like all businessmen, the “oil marketers” were quick to sense opportunity. Several of them set up accounts with banks to harness the business opportunity of subsidy, not petroleum products marketing. Sanusi Lamido Sanusi provides insight into these fraudulent dealings in his write up:

“You establish an LC for importing 20,000MT of PMS and the PPPRA says this is at a landed cost of N145 for example per litre. So u know that for every litre in that vessel you will get at least N85 as subsidy. Now you have a number of "possiblities":

1. You can off load 5,000 MT and bribe customs and other officials to sign papers confirming u offloaded 20k MT. Then do the same across the chain with a paper trail showing you delivered 20k MT to a tank farm, and maybe even that u transported it to Maiduguri entitling you to a share of the price equalization fund. Maybe for N20-N30 per litre u bribe all those who sign the papers. The 15k MT you take to Benin or Ghana or Cameroun and sell at market price thus makin an additional "profit" of N55/ltr on 15,000MT!

2. You can just forge documents and have them stamped without bringing in anything and collect the subsidy-PPPRA pays based on DOCUMENTS.

3. You can bring in the fuel, load on tankers, sell some at N65N some at 80 some at 100 some across the land borders.

You can do all this and no one can catch it or prove it because somebody was paid to sign off on docs. And with a high enough margin there is too much temptation to be resisted and firepower for bribing officials.

When I spoke to the house of reps I told them why I was suspecting fraud. It starts from PPPRA "allocations" based on "capacity". You will find a company like Mobil with capacity for say 60,000 MT and a relatively unknown name with a capacity of say 90k MT. Red alert number 1.

Although PPPRA is supposed to give license only to marketers with a national distribution network you see names of companies where you have never seen a filling station in their name.

 

I was a chief risk officer in UBA and in FBN for many years approving loans so I know the name of every big player in every industry that nigerian banks lend to as these are among the biggest banks in the country. I see names on the list I don't recognise either from portfolios. I looked at or industry studies over the years. Red alert number 2.

I studied the papers presented to PPPRA in a short period in 2010 (I won't tell you how I got them!). And I was surprised that on some days over 10 vessels are said to have discharged cargo in lagos on the same day-clearly the same officers stamping and "verifying" that the vessels were SEEN. Is it really realistic that on the same day 13-15 vessels can discharge in Lagos? Red alert number 3. “

According to the same write up, Femi Otedola’s Zenon and AP owe the Nigerian banking system about 220 billion naira in bad loans that have been taken over by AMCON, yet he did not have stock of petroleum products worth a fraction of that amount. You can bet he also did not have the cash in his corporate accounts. More importantly, he could still afford to give the Jonathan/Sambo campaign organization 200 million during the election season.

I have taken time to quote the Governor of Nigeria’s Central Bank in order to show you, my reader, the sleaze that makes for an arresting Hollywood thriller. On all sides, you see subterfuge, greed and corruption. You see institutionalized kleptomania across the value chain, oil marketers, port officials, PPPRA, DPR and bankers who knew the truth and never said it until now!

It is clear to me that the subsidy scheme was created and executed by the government to enrich their friends and themselves. It means the nation budgeted huge amounts of money which we knew was going to be pocketed by a few people.

Why is the Goodluck government removing the subsidy? Profligacy is not sustainable on the long run! They now want us to pay for their incompetence. It is clear that no official wants to let the truth out of its hiding place. We are broke! Our external reserve is down to 27 billion dollars from 80 billion when Obasanjo handed over. Our internal debt is 5 trillion naira. External debt is back to 35 billion dollars. Excess crude oil account is down to zero. We are broke yet the only rich people in Nigeria are politicians and some pastors. Politicians who earn more than every other earthly government and pastors who collect earthly money, lay hands on and promise heavenly bliss to men of shady character. Some of these super rich pastors are not saying anything now. Some of them are speaking as a matter of expediency. Some of them have private jets with which to fly out of Nigeria. They share that same luxury with the dirty politicians they bless and celebrate with front row seats in their churches.

We need to ask our government what they are getting paid for. Is it the national pride that we currently enjoy or our infrastructure that is out of this world? We still have polio in Nigeria in 2012. We have hospitals that are not fit to treat animals. No government primary school competes with a public school in South Africa. Our universities provide better criminals than scholars. We do not have roads. in the place of roads we have long stretches of death traps designed to keep the population in check through untimely death. We do not have electricity. We have lost our factories to Ghana. Just a few grumbling manufacturers remain, who are yet to get land in Ghana.

We have lost everything we met on the land. Cocoa, palm oil, groundnuts, cotton, cashew and rubber have been forgotten and are better produced by nations who came to learn from us. We have lost our moral compass, our society is fractured, our statehood is threatened. Our citizens are in all prisons around the world. Some of them prefer foreign prisons to Nigeria. Our passport is treated with disdain everywhere you present it. Why should our Senate Leader earn 600 million naira per annum? Why should our senators earn 30 million naira per month? Why should our National Assembly gulp 1.2 trillion naira per annum while we try to save 1.4 trillion from subsidy removal ? Why should our government be this big with special advisers on cassava and beans affairs? Do we need 72 ministers and 36 states? Do we need a Minister for Water Resources when 95 percent of Nigeria cannot recognize a water faucet? Why would our president spend close to a billion on food while close to eighty percent live on less than a dollar a day? Why should he budget a billion for generators and diesel when he is urging us to believe in his power sector reform? Why does our President need 6 private jets? Why do our governors move around with twenty-vehicle convoys while David Cameron has just two vehicles and one outrider? 

Why should our politicians keep their salaries when Obama slashed his? Why should we continue to be wasteful when the handwriting on the wall says “danger”? Why should we believe this government when it says the subsidy gain will be properly reinvested? Despite my utmost respect for Christopher Kolade, I have this ominous feeling that he is being set up to be rubbished. Same for Alfa Belgore!

Labaran Maku must be suffering from foot and mouth disease if he really used that cavity to announce 1,600 buses as palliative measure for 170 million people. Lagbus has 5,000 buses. What impact will that make? You mean the government of Nigeria needs to subject her citizens to hardship in order to buy 1,600 buses. On the strength of the initial information on how the savings will be invested, given by Labaran Maku and the minister for Labour, the government is bereft of both ideas and dictionaries! 

To move Nigeria forward, we must do the following:

• Demand more transparency from the government especially in oil dealings and allocations. Remember the way Okonjo Iweala was publishing the allocations to all tiers of government.
• Demand immediate reduction of the size of this government and its wasteful ways.
• Demand specific prioritized projects which should be tied to the subsidy savings (if we negotiate a reduction instead of outright reversal).
• We need to demand same from our state governments, prune down the waste.
• We need to ensure our protest is peaceful and organized to avoid loss of life.
• We need to resist provocation and divisionist tendencies.

• We need to pray for Nigeria. I still believe God can use this moment to make a change in Nigeria. Pray that anyone who steals from Nigeria’s commonwealth will experience pain and sorrow. Pray for God to help us in the same way he intervened Abacha-wise.
• Share additional information online, do not stop the flow of information. The more we know, the better we become.