Damning oil fraud probe offers hope to Nigerians

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."

Optimisitic
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."

Subscribe to the M&G

These are unprecedented times, and the role of media to tell and record the story of South Africa as it develops is more important than ever.

The Mail & Guardian is a proud news publisher with roots stretching back 35 years, and we’ve survived right from day one thanks to the support of readers who value fiercely independent journalism that is beholden to no-one. To help us continue for another 35 future years with the same proud values, please consider taking out a subscription.

Related stories

Advertising

Subscribers only

How lottery execs received dubious payments through a private company

The National Lottery Commission is being investigated by the SIU for alleged corruption and maladministration, including suspicious payments made to senior NLC employees between 2016 and 2017

Pandemic hobbles learners’ futures

South African schools have yet to open for the 2021 academic year and experts are sounding the alarm over lost learning time, especially in the crucial grades one and 12

More top stories

Egypt, Seychelles get first jabs

The two countries have rolled out China’s Sinopharm vaccine, but data issues are likely to keep some countries from doing the same

Fashion’s future is bricks and clicks

Lockdown forced reluctant South African clothing retail stores online: although foot traffic in brick-and-mortar stores remains important in a mall culture like ours, the secret to success is innovation

What the Biden presidency may mean for Africa

The new US administration has an interest and much expertise in Africa. But given the scale of the priorities the administration faces, Africa must not expect to feature too prominently

Zuma, Zondo play the waiting game

The former president says he will talk once the courts have ruled, but the head of the state capture inquiry appears resigned to letting the clock run out as the commission's deadline nears
Advertising

press releases

Loading latest Press Releases…