How Nigerian System Breed Corruption: Oil Theft, Insecurity And Economy – Richard Odusanya.

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Oil Theft is a Black Spot on Nigeria’s Economy. As a major oil producer, our beloved country, Nigeria, faces a serious problem with oil theft, as thieves siphon off oil from poorly maintained and under-guarded pipelines. Oil theft in Nigeria is considered to be the illegal appropriation of crude or refined oil products from the pipelines of multinational oil companies.

Unfortunately, oil theft in Nigeria is facilitated by the pragmatic cooperation between security forces, militia organizations, the local population, and oil company employees who use a variety of methods to steal oil from the multinational oil corporations that are stationed within the country. It also speaks directly to the nefarious activities of illegal oil refineries across the creek with an unimaginable magnitude of lost.

Ironically, the example of such nefarious activities is the Friday 22nd April, the disaster at Imo and Rivers State boundary town Egbema. At least 100 people have been reportedly killed following an explosion at an illegal oil refining site in the Ohaji/Egbema area of Imo state. The authorities are said, to be looking for the operators of the refinery. Oil theft and pipeline vandalism have been serious issues of concern in Nigeria for decades. Authorities say that the country loses 150, 000 barrels a day or up to $4billion a year to these activities.

Clearly, the aforementioned is the background and perhaps many other privileged information, may have been partly responsible for the position of our revered clergy, the General Overseer of the Redeemed Christian Church of God (RCCG), Pastor Enoch Adeboye, has rued oil theft in the country, warning that Nigeria might go bankrupt if the trend is not checked. ‘Daddy Adeboye,’ as he is fondly called, said this in a sermon to his congregation during a thanksgiving service on Sunday.

Similarly, the immediate past Senate President, Dr Bukola Saraki’s position validates the point. He had said; “N2trn Stolen from Oil Sector, Saraki Alleges, Says Nigeria is Broke. The former governor of Kwara State further revealed that up to 70 million litres of fuel are stolen daily, alleging further that the country loses about $2 billion annually to the fuel subsidy scam. Petrol subsidy payments grew by 349.42 per cent from N350 billion in 2019 to N1.573 trillion in 2021, propelled by the rising price of crude oil in the international market and the falling value of the Naira.

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The cost of subsidizing the product in 2020 was N450 billion. In 2022 alone, the total cost of subsidy in January and February was N396.72 billion, the latest data from the Nigerian National Petroleum Corporation, NNPC, has shown. Federal legislators approved the sum of N4 trillion to be spent on petrol subsidies in 2022.

The Federal Government had previously disclosed through the Minister of Information, Alhaji Lai Mohammed, that it spent N10.413 trillion on fuel subsidies between 2006 and 2019. With Nigeria importing all its petrol from refineries abroad, the low value of the Naira has had a significant impact on the pricing of the product in-country. None of the three government-owned refineries is currently operational, despite huge investments in their Turn Around Maintenance (TAM) by the government. The current administration has failed on its promise to make the refineries operational within a short period of assuming office.

The annual expenditures on petrol subsidy under the current administration contrast very sharply when compared with fuel subsidy under the government of former President Goodluck Jonathan, which was accused of fuel subsidy fraud. According to data published by the defunct Petroleum Products Pricing Regulatory Agency, PPPRA, the Federal Government paid a total of N2,105.92 trillion in 2011, an increase of N1,437.84 trillion from the 2010 payment. It also noted that in 2012, N1.35 trillion was paid as a subsidy, the highest within the period under review. “A total of N 1, 316 trillion in 2013, N1,217 trillion in 2014 and N653.51 billion in 2015 was paid as subsidy claims,” it added.

Determined to curb fiscal leakages associated with the fuel subsidy regime, the then President, Dr Goodluck Jonathan, had announced deregulation of the downstream sub-sector, with a view to eliminating fuel subsidy. However, incumbent President Mohammadu Buhari, and other opposition party leaders, under the Save Nigeria Group, organised nationwide protests to stop Jonathan from going ahead with the decision. Other notable Nigerians that led the mass protest included Pastor Tunde Bakare, who was Buhari’s running mate in Congress of Progressive Change (CPC) and Governor Nasir el-Rufai of Kaduna State.

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The protests forced, the then President, Dr Goodluck Jonathan to rescind the policy. When Buhari took over power in 2015, his government initially refused to pay fuel importers for products imported into the country. It took a fuel crisis, characterised by long queues, to force the government to pay the debts, as the marketers insisted that they would not import more products unless their earlier bills were settled.

Instructively, the current administration was to later come to terms with the realities of the rot in the industry. Buhari made himself Minister of Petroleum and by so doing, has directly managed the petroleum industry. However, he has failed to make any policy changes. The current administration has failed in its promise to make the four refineries owned by the Nigerian National Petroleum Company Limited become operational, despite huge investments in their Turnaround Maintenance.

The NNPC has given the excuse of high under-recovery as the reason why it has not been remitting oil revenue to the Federation Account, from where the three tiers of government share federation revenue on a monthly basis.
Even the Monetary Policy Committee, MPC, recently aired its concern over NNPC’s non-remittance of oil proceeds at a time when oil prices have risen very high to the advantage of other oil-producing nations of the world.

The exact volume of Premium Motor Spirit, PMS, popularly known as petrol consumed in the country remains a subject of contention. The state governors had rejected the NNPC’s claim of 75 million litres of daily consumption. The Minister of Finance had announced that a committee was working to reconcile the financial position of the NNPC, in respect of the under-recoveries, and the remittance into the federation coffers

Nigeria is bedevilled, it is obvious. However, the evil tripod that our beloved country Nigeria is sitting on, are basically the Oil theft, serious leakages in the system and security issues ranging from killings, banditry, kidnappings and insurgency. This is certainly a very big challenge awaiting a positive response from a transformational leader.

Interestingly, minimum wages are indexed by the performance of an economy, especially in the parities between the interplay between your Gross Domestic Product – GDP – and your population ie your per capita income.
Nigeria GDP: $514 billion. Population: 206.1 million. Per Capita Income: $2,360.00. With these statistics, you can clearly see how unproductive the average Nigerian is. The way to go is from consumerism to productive and ultimately, an Industrialized Nation.

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Conclusively, permit me to also use the example of Singapore. The man most responsible for Singapore’s astonishing transformation from colonial backwater to economic powerhouse describes how he did it over the last four decades. It’s a dramatic story, and Lee Kuan Yew has much to brag about. To take a single example: Singapore had a per-capita GDP of just $400 when he became prime minister in 1959. When he left office in 1990, it was $12,200 and rising.

Much of this was accomplished through a unique mix of economic freedom and social control. Lee Kuan Yew, was a politician and lawyer who was prime minister of Singapore from 1959 to 1990. During his long rule, Singapore became the most prosperous country in Southeast Asia. This is the result of a TRANSFORMATIONAL, creative and innovative leader.

Part of the success stories of Singapore is the pragmatic leadership of the late Lee Kuan Yew and his successors; an effective public bureaucracy; effective control of corruption; reliance on the “best and brightest” citizens through investment in education and competitive compensation; and learning from other countries.

Unarguably, thinking outside the box is more than just a business cliché. It means approaching problems in new, innovative ways; conceptualizing problems differently; and understanding your position in relation to any particular situation in a way you’d never thought of before. Ironically, if our leaders are truly pawns in the hands of foreign interests, I wonder why the state would not be perpetually underdeveloped. Therefore, the need for a TRANSFORMATIONAL creative and innovative leader in the 2023 general elections cannot be overemphasized.


Richard Odusanya is a Social Reform Crusader and the convener of AFRICA COVENANT RESCUE INITIATIVE ACRI

Richard Odusanya
@Richard_Odusanya is 9News Nigeria special guest writer on Politics, Africanism, African Emancipation and Humanitarianism
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