Oiling the Wheels of Nigeria’s Anti-Corruption Drive
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Tags: anti-corruption, corruption, Governance, Petroleum
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The new head of Nigeria’s state oil firm has fired eight senior managers. His success or failure in turning around the wasteful oil sector could be a test of the resilience of President Buhari’s anti-corruption drive.
It seems that Emmanuel Ibe Kachikwu, a former executive of Exxon Mobil and now head of the Nigerian National Petroleum Corporation (NNPC) did not hesitate.
“The Federal Government has approved the retirement of all eight Group Executive Directors of the Nigerian National Petroleum Corporation with immediate effect,” the NNPC said in a statement emailed swiftly after Kachikwu’s appointment.
President Muhammadu Buhari appointed Kachikwu as part of a crackdown on corruption and mismanagement in this vital sector of the Nigerian economy.
Buhari, a former military ruler and minister of petroleum, was elected by Nigerians on March 28 on a platform of change that included an anti-corruption drive.
Tukur Abdulkadir, lecturer in political science at Kaduna State University, told DW many were pinning their hopes on Kachikwu’s appointment at the NNPC.
“With the president solidly behind him, much is expected,” he said.
Last month Buhari said the NNPC would be divided, but did not give further details.
The eight group executive directors who were dismissed worked directly under the head of the firm.
They were in charge of exploration and production, refining and petrochemicals, engineering and technology, gas and power, business development, finance and accounts and commerce and investments.
Billions wasted
Oil is Nigeria’s lifeblood. It accounts for 70 percent of government revenues, which have been battered recently by the decline in crude oil prices.
A report released this week by the non-profit Natural Resource Governance Institute (NRGI) said that NNPC’s oil sales needed an urgent overhaul. Billions of dollars a year in proceeds were either wasted or unaccounted for.
Average prices for Nigeria’s light sweet crude topped $110 (101 Euros) during the boom of 2011 and 2014. Yet during the same period treasury receipts from oil sales fell significantly, the report said.
As well as overhauling oil sales to “stop the bleeding,” NGRI also urged deeper structural reforms to Nigeria’s oil sector to “cure the patient.”
Nigeria is one of the world’s biggest producers of crude, but lacks working refineries so the oil has to be exported and its products then imported at market prices.
Abuse of subsidies
The Nigerian government keeps the price consumers pay for fuel artificially low by paying subsidies to oil importers – the difference between the import price and the street price.
This system is open to abuse. Some importers rent empty vessels, pay officials to say they have fuel on board and then pocket the subsidies. But the inventiveness of the corrupt mind doesn’t end there.
“They also bring vessels filled with petrol, get the papers and then go to neighboring countries to sell it there, so they have the double benefit of subsidies and sales,” Debo Adeniran, head of the Coalition Against Corrupt Leaders lobby group, told the AFP news agency.
President Buhari believes graft has made Nigeria a global laughing stock, but even he has admitted that the scale of the problem has yet to be fathomed in a country that ranked 136th out of 175 in Transparency International’s 2014 Corruption Perceptions Index.
“I knew things were not working because Nigerians were queuing up at filling stations,” one resident of the capital Abuja told DW.
Author Mark Caldwell (Reuters, AFP)
