Nigeria is neck-deep in financial asphyxiation inflicted by those who have reduced its economy to a circus. The country earns more than enough to fend off the humiliation of currency depreciation and lurking inflation. But the Nigeria National Petroleum Corporation (NNPC), the custodian of the nation’s oil wealth, has become something of a duplicitous financial emperor. It collects, allocates and disburses funds without recourse to even the Ministry of Finance which is headed by a former managing director of the World Bank.
Those who watched the proceedings of the finance committee of the senate last week when the managers of NNPC, ministers of finance and petroleum resources appeared to account for the unremitted $20 billion would be ashamed to note that a development economist who rose to the position of managing director of the World Bank is the finance minister of Nigeria.
The World Bank itself must be ashamed that Mrs. Ngozi Okonjo-Iweala climbed all the rungs of its bureaucratic ladder to become its managing director only to cower as an infinitesimal, fraud-prone corporation usurped her statutory responsibility of disbursing government funds after due appropriation process. The spate of extra-budgetary spending and failure to remit funds to the federation account has become so endemic that Okonjo-Iweala cannot, but join in defending the crime.
At the hearing of the senate committee last week, Ahmed Makarfi, chairman of the committee, asked Okonjo-Iweala whether kerosene subsidy was captured in the 2014 Appropriation Bill. The minister said it was not.
Makarfi asked whether the NNPC or the Ministry of Finance was planning to submit a supplementary budget on kerosene subsidy to the National Assembly. The finance minister retorted with studied equivocation.
NNPC claims to have spent a good chunk of the $20 billion that Sanusi Lamido Sanusi, the governor of the Central Bank of Nigeria (CBN), said had not been remitted to the federation account, on kerosene subsidy.
Sanusi insisted that late President Umaru Musa Yar’Adua halted kerosene subsidy about five years ago. Yar’Adua’s decision might have been informed by the fact that the subsidy was not getting to the consumer. Right now, the lowest pump price of kerosene is N130 per litre. Yet NNPC claims to have squandered N560 billion subsidizing it to N50.
From the development in the senate last week, it is obvious that Okonjo-Iweala has surrendered control of the country’s revenue to NNPC. The corporation has already allocated funds for kerosene subsidy in 2014, but it does not want the National Assembly to superintend it. It would not wait for the Ministry of Finance to disburse it either.
Mrs. Diezani Allison-Madueke, the minister of petroleum resources, argued deceitfully that if kerosene subsidy was halted, the price of the product would hit the roof and bring down the economy. However, she implicitly alluded to the basic truth that the subsidy does not get to the consumer.
The economic sense in retaining a subsidy that benefits only a handful of NNPC officials and some middlemen remains indefensibly puerile. However, even if government has to keep pouring money into the bottomless pit named kerosene subsidy, due appropriation and disbursement processes must be followed.
The NNPC is cheating Nigeria from both ends by usurping the power to spend federally collectible funds without recourse to the National Assembly. The corporation dubiously traces every unremitted fund to kerosene subsidy.
Mrs. Allison-Madueke wants a law court to determine whether NNPC’s act of spending funds not appropriated by the National Assembly was illegal.
That is arrant puerility. The way out of the quagmire is the forensic audit that Okonjo-Iweala belatedly alluded to. The law authorizes the minister of petroleum resources to fix the prices of petroleum products. In some instances, government may have to pay the difference between the landing cost and pump price of the product by way of subsidy. However, no one in the federation has the power to appropriate funds for any project without the approval of the National Assembly. That is the crime that NNPC has been perpetrating. Mrs. Allison-Madueke’s gimmick is a senseless delay tactic designed to buy time for more funds to be misappropriated in an election year.
On the other hand, it is clear that Okonjo-Iweala is either overwhelmed by the ubiquitous Nigerian factor or she is simply playing Pilate over NNPC’s dubious financial engineering.
To cover up for the abdication of her responsibility of funds disbursement, the minister of finance now resorts to downright hypothetical deceit. Last week she deceitfully blamed the poverty in the land on a population growing faster than the economy. The minister in her bare-faced lie was deliberately vague on the country’s population growth rate.
However, where the economy grows at 6.5 per cent and the population grows at 2.8 per cent, even a primary six pupil knows which one grows faster.
Ironically President Goodluck Jonathan bought Okonjo-Iweala’s dummy and recently blamed impoverisation of the Nigerian people on faster population growth rate. He was quoting his finance minister.
By now everyone is convinced that NNPC is at the root of the financial asphyxiation plaguing Nigeria. And that is because Okonjo-Iweala has abdicated her responsibility of disbursing funds to government agencies.