14 June 2012

Nigeria: Subsidy Report Fallout - the Scandal Vs. the Issues

Photo: Vanguard
Rep. Farouk Lawan accused of receiving bribe from oil marketers


We spent last week mourning the loss of our citizens in the Dana air crash. Before we recovered came the bad news of alleged bribery involving the Ad Hoc House Committee set up to probe the fuel subsidy scandal.

The media was awash with accusations and counter accusations between the Chairman of the Ad hoc Committee of the House of Representatives on Petroleum Subsidy, Honourable Farouk Lawan and the Chairman of Zenon Petroleum, Mr Femi Otedola over allegations of bribery involving the sum of $620,000. Many of us did not believe it but when Otedola said there was a video recording of the incident, we developed goose pimples. We agonised over what the allegation would do to Hon Farouk Lawan, a reliable ally for just causes and to his panel's report, our ammunition for demanding action to tackle high level corruption. The allegations generated concern among civil society groups but did not dampen our enthusiasm for demanding an end to corruption and impunity. If anything, members decided to stand up for full implementation of the Subsidy Report. The bribery scandal is an issue for the House to investigate and hand over to the law enforcement agencies but should not detract from the issues of mind bungling corruption perpetrated by the cabal in the oil sector.

We decided to revisit the Charter of Demands developed by our group of concerned Nigerians, under N-Katalyst, a non partisan network of individuals with a deep commitment to the promotion of Nigerian unity and progressive change. The group organized a National Symposium in Abuja on 30 April, 2012, to address the issues thrown up by the House Ad-hoc Committee Report. The outcome was a document titled: Mega Corruption In The Fuel Subsidy Regime: Charter of Demands. We recalled that the removal of subsidy on petrol by the Federal Government of Nigeria on the January 1 2012 was ill timed. We viewed it as an anti-people policy and a desperate move by the Federal Government to punish hapless Nigerians for the corruption that the Government itself organizes in the oil sector. This led to massive protests across the major cities of Nigeria in strong disapproval of the decision to remove the subsidy.

As a result of the protests, the House of Representatives in an emergency session on the 8th of January 2012 set up an Ad-Hoc Committee to verify and determine the actual subsidy requirements in Nigeria. The Report of the House of Representatives Ad-hoc Committee on the Fuel Subsidy disclosed that there is monumental and unprecedented level of fraud in the subsidy regime. We developed a charter of demand that government must implement to save this country from the strangle hold of looters. Our stand has been underscored by the Nigeria Labour Congress on behalf of the workers who sweat and toil to create wealth. NLC stressed that the final report of the Committee 'still contains names and details enough for thorough and transparent investigation. The report, which has been submitted to the executive arm, must be subjected to proper investigation and prosecution of all those indicted'. Space constraints make it impossible to carry the full N-Katalyst Charter of Demands, but the following are highlighted

- Ending Impunity for the Fuel Subsidy Cabal

Public corruption has run out of control. We are recent witnesses to the police pension scam and the unbelievable spectacle in the House of Representatives on the power probe where it was discovered that over $16bn was spent to provide electric power without commensurate results.

We are looking at a pattern of organized looting of our national resources emanating from the Executive Branch. It continues because Nigerians do not stand up to fight and hold their leaders accountable for their actions. It will not be enough to insist that the culprits be prosecuted and punished. We must begin this fight by demanding the following:

-Getting the Judiciary to do its Work

The spectacular failure of recent high profile criminal prosecutions relating to corruption dramatizes the collapse of the system of public prosecution in Nigeria. Public prosecution rests on a tripod - the detection and investigation of crime, the prosecution of offenders and the conviction and punishment. All levels are in crisis due to the appointment of successive Attorney Generals who see themselves as the President's poodle rather than an independent and impartial officer of the State determined to advance the cause of justice. There is no political will at the very highest echelons of authority to fight corruption in the country.

- Restructuring of the Petroleum Sector

The structural conditions which allowed for the monumental fraud is that NNPC remains as the regulator, main producer and marketer of petroleum and its products, both upstream and downstream. It is a clear conflict of interest that allowed the organization to become a behemoth with no respect for laws and processes. There is a need for deregulation so as to stop NNPC from regulating the downstream sector.). We demand as follows: A Judicial Commission of Inquiry should be established into the operations of the Petroleum Ministry and NNPC.

-The management and the board of NNPC should be overhauled and those involved in any infractions should be investigated and prosecuted. The company should be unbundled to make it more transparent and efficient.

-NNPC through local refining, swap arrangements and offshore processing should be able to provide enough fuel for Nigeria. Therefore the government has no reason to grant subsidy import licenses to other companies.

- The chairman and board members of PPPRA between 2009 and 2011 should be investigated for complicity or gross negligence. The executive secretaries of the PPPRA during that period should be investigated and prosecuted by anti-corruption agencies. PPPRA should conduct a full performance assessment on all companies who import fuel into Nigeria.

- The passage, within a maximum of three months, of the original, undiluted Petroleum Industry Bill.

-On Providing Fuel at Reasonable Prices

N-Katalyst accepts the Committee's estimate that the probable daily consumption of Petrol from the record of marketers and NNPC comes to an average of 31.5 million litres. It, therefore, proposes the continuation of subsidy for Petrol and Kerosene and suggests a budget of N806.766 billion for the 2012 fiscal year. The Committee asserted that the 445,000 bpd allocation to NNPC is sufficient to provide the Nation with its needs in petrol and kerosene, with proper management and efficiency.

- Kerosene subsidy should resume as a means of helping the poor and aiding the struggle against deforestation in the search for fuel wood.

-Government must, as a matter of urgency, privatize all its refineries because the refineries have become mere cash cows for NNPC bureaucrats

On Citizen Engagement

N-Katalyst is aware that Government will not act if citizens do not mount sufficient pressure. We Nigerians must act more as citizens and not subjects. The country belongs to us all and we can no longer leave the political space for politicians, bureaucrats, common thieves and crooks. The fight against corruption must be comprehensive and all encompassing; all sections of the society must stand up and fight until we bring this monster under control. N-Katalyst commits to working with other civil society groups to ensure that these demands are met. The bribery allegation should not be used to divert attention from the implementation of the report of the Committee. By the Subsidy Report we stand!

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