Damning oil fraud probe offers hope to Nigerians

Nigerian businessman Femi Otedola (right). (Pius Utomi, AFP)

Nigerian businessman Femi Otedola (right). (Pius Utomi, AFP)

But as the man behind the report has turned from accuser to accused, a mushrooming and convoluted scandal has threatened to derail a tentative opportunity for change.

Faced with the biggest protests in Nigeria's history after an abrupt attempt to pull a decades-old state fuel subsidy programme backfired, President Goodluck Jonathan backtracked and commissioned several probes into the shadowy subsidy programme in January. 

Three months later, lawmaker Farouk Lawan's inquiry unveiled staggering graft: in the past three years alone fuel importers illegally drained $6.8-billion in subsidies from the nation's coffers. In one case, payments of $6.4-million flowed from the state treasury 128 times within 24 hours to "unknown entities".

But questions have also emerged about the political will of an administration which swept into power on a promise to "transform" the corruption-riddled two-million-barrel-per-day oil industry.

"People feel tired, frustrated and helpless. There's such a separation between people and the government because – as happens a lot in resource-rich countries – the government doesn't depend on people for taxes," said Folarin Gbadebo-Smith of Lagos-based Centre for Public Policy Alternatives.
"It's like once they get into power, the people become a nuisance, and the longer they are in power, the worse it becomes."

Many had lauded the Lawan report for not being an "unnamed soldier" job – a term popularised by Afrobeat legend and government agitator Fela Kuti to dismiss routine inquiries which whitewash official-linked corruption. Seventy-two fuel importers, numerous with allegedly close links to senior government officials, were singled out. Chief among them was the shadowy Nigerian National Petroleum Company, ranked the world's least transparent national oil firm and single-handedly responsible for almost half the siphoned funds , the report said.

'Mr Integrity'
Barely a month later, its author Lawan was embroiled in his own sordid saga. Fuel importer Femi Otedola, whose fortune has frequently bankrolled the ruling party, alleged Lawan demanded hundreds of thousands of dollars to remove innocent companies from the list of wrongdoers. Otedola, the brash brainchild of Zenon Oil, claims he gave Lawan $620 000 as part of a secretly-filmed sting operation.

Nicknamed "Mr Integrity," Lawan was respected for felling influential politicians in the past. He has admitted accepting the money – but claims it was intended as evidence of  attempts to bribe influential committee members – and dismissed crackly alleged phone calls between the two as "doctored," his lawyer Mike Ozekhame told the Mail and Guardian. Instead, Lawan maintains, he was acting as an "agent provocateur".

More difficult to square has been his sudden turnaround in requesting his fellow legislators strike Zenon Oil off the list of named and shamed importers after clandestinely meeting its CEO. "When he met Mr Otedola, Mr Lawan was given documents that proved Zenon Oil was erroneously added to fuel importers when in fact it only lifts diesel," his lawyer Ozekhame explained.

"Mr Lawan's belief is that members of a powerful oil cartel are attempting to smear his work," Ozekhame added.

Undoubtedly the report has struck at the heart of power in Nigeria's labyrinthine oil sector, and has already claimed some powerful scalps. Last week Jonathan removed top board members of the country's oil firm in an unprecedented move he said would help clean up the powerful Nigerian National Petroleum Company (NNPC). Long-serving NNPC insiders chosen as replacements could be both an asset or liability in implementing reforms, analysts say.

"A far bolder statement could have been made by removing [oil minister Alison] Diezani. That someone so high up stayed on cements the idea some people remain untouchable," a European diplomat said, adding that oil companies frequently had to deal with "unusual requests."

France's Total, Italian-owned Eni and Anglo-Dutch Shell dominate the industry, while smaller competitors including South Africa's state-owned PetroSA are seeking slices of the oil pie.

But there is guarded optimism, too.

"In some ways I'm more optimistic than ever because now Nigerians are having the opportunity to talk about what their leaders are doing. That's the first step and it's a whole different ballgame now," said Yomi Olayinka, a fervent card-carrying member for almost the entire 13 years Nigeria's ruling People's Democratic Party has been in power.

Still, for some the allegations and counter-allegations are symptomatic of orchestrated scandals designed to provide smokescreens for vested interests.

"If this drama is a deflection, then it's a joke. To reform you have to change the whole structure and redefine the entire role of the NNPC," said Bismarke Rewane, a former presidential advisor at Lagos consultancy Financial Derivatives. "The Nigerian public will still demand reforms, if not now then in the near future. For this administration this is now a battle for credibility in the eyes of the public."

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