NNPC and unending fraud allegations

For many months now, the Nigerian National Petroleum Corporation (NNPC) has been at the centre of different fraud allegations. The magnitude of alleged fraudulent dealings in the agency has become quite disturbing, especially more so as the numerous accusations of corruption are never fully resolved, as they simply fizzle out following feeble explanations from the agency and the Minister of Petroleum, Mrs. Diezani Alison-Madueke.

The institution of a number of probes into allegations of financial malfeasance at the agency has not helped to stem the tide of fraud allegations, probably because no one has actually been identified, prosecuted or jailed on account of the allegations. The Federal Government, on its part, hardly demonstrates sufficient interest in bringing persons alleged to be responsible for fraudulent activities at NNPC to book. The numerous probes into the sleaze allegations have failed to stem the tide of such accusations.

The most recent allegation swirling around this organisation involves its alleged role in a whopping N1.07 trillion underhand deal with an amalgam of Swiss trading companies. The lid on the questionable deal, which NNPC has denied, was blown off by the House of Representatives, following a motion introduced by Hon. Abiodun Balogun. The motion drew the attention of the parliament to an unwholesome report by
a Swiss non-governmental organisation, Berne Declaration, detailing how NNPC, in connivance with major oil dealers, are swindling Nigeria of billions of oil revenue through sale of crude below market value.

According to the report entitled:”Swiss traders’ opaque deals in Nigeria”, NNPC officials allegedly engaged in fraudulent schemes through some “letter box companies”. The amount involved is said to be in excess of $6.8 billion (N1.07 trillion).  The scope of the dirty deals was reportedly described as the “greatest fraud Africa has ever known”.

Specifically, an NNPC trading partner and a commodity trading firm were implicated in the illicit deals. Already, the House of Representatives has mandated its Committees on Petroleum (Upstream), Petroleum Resources (Downstream), and Justice, to investigate the report. The Committees were given one month to do their assignment and turn in their reports.
The unending stream of allegations of corruption at the NNPC is worrisome. Early this year, an audit report by the Nigeria Extractive Industries Transparency Initiative (NEITI) reportedly uncovered financial fraud estimated at over N1 trillion in NNPC between 2009 and 2011.

In its report to the Federal Government, NEITI recommended that the corporation refund to government treasury the sum of N4.423 billion. But NNPC, as usual, denied that such fraud took place and insisted that it would not make any refund.

Not long ago too, the corporation was embroiled in an allegation of pilferage totalling  N321billion  accruable to the Federal  Government.

The alleged pilferage was the outcome of an audit report of the House of Representatives Committee on Finance resulting from cost of production resulting from payments for Joint Venture Cash Calls (JVCCs) and petroleum subsidy payments from January to September, this year.

While we welcome the latest probe by the House of Representatives, it is a matter of public concern that nothing might come out of it, as happened with previous investigations and recommendations to government on NNPC.

The frequent claims of fraudulent activities at NNPC are troubling. The fact that the accusations often end up in unsubstantiated denials by the agency’s top shots, only for more serious allegations to come out, without any credible resolution of the matter, does not suggest that Nigeria is serious about ending corrupt dealings in the oil sector. We believe that the lackadaisical attitude to the allegations encourages even more heinous scams to be perpetrated in the organisation.

As the Lower House said, Nigeria is reportedly the only oil producing nation that sells 100 percent of its crude to private traders, rather than market it herself, thereby losing money in the process. This is a self-inflicted injury and NNPC should not be allowed to continue the practice.

Government should not continue to remain indifferent to the various revelations of corruption in NNPC that has portrayed it as the “sick baby” of Nigeria. NNPC officials must convince Nigerians that the process leading to the appointment of its trading partners in respect of crude oil lifting is transparent.

We, therefore, call for a comprehensive probe of the operations of NNPC. Those who are found guilty of fraud in the agency should be relieved of their positions. We may also consider a dissolution of the current board and a reconstitution of a new one made up of men and women of proven integrity who can put the agency on a sound footing.

NNPC cannot continue to be at the centre of intense controversies regarding revenue remittances to the national treasury. The present perception of NNPC and the leadership of the nation’s oil industry as arrogant and above the laws of the land is unfortunate. It is high time government began to treat allegations of graft at NNPC with sincerity, instead of the  present kid gloves approach.