The North and funding of the Nigerian oil industry - Vanguard News

The North and funding of the Nigerian oil industry - Vanguard News - Professor Sagay

"Perhaps, by constantly repeating this delusional lie, the Northern political and intellectual elite think it will stick in Nigeria’s collective consciousness as the truth.  The truth is that the Northern elite is addicted to the proceeds of Niger Delta oil and gas.  They have completely abandoned any pretence at productivity and internally generated revenue.  The North is now completely dependent on the monthly federal allocation, which is the same thing as Niger Delta oil proceeds.  The blatant falsehood about Northern funding of the initial stages of the industry, arises out of the psychological need to justify this total dependence on Niger Delta oil proceeds for survival and for virtually every need of daily existence.  The Northern reasoning goes like this:  Oil exploration in the Niger Delta was financed by Northern groundnut proceeds and therefore the North is equally entitled to Niger Delta oil proceeds as the Niger Deltans themselves.  But what is the truth?"

"The first oil prospecting in Nigeria was by a German company known as the Nigerian Bitumen Company. It commenced operations in 1908 and wound up its activities in Nigeria at the commencement of the First World War in 1914."

"The second attempt at oil prospecting in Nigeria was in 1937 by a company known as Shell D’Arcy.

Shell D’Arcy also stopped operations in 1940 because of the Second World War. In 1946, Shell Company was joined by British Petroleum, BP, to establish the Shell BP Company which finally discovered oil at Oloibiri in 1956. These companies were later joined by Elf, Texaco, Agip, Gulf Oil, Mobil Producing and other oil prospecting and producing companies."

"From these early beginnings in 1908 to the present moment, that is 2014, the Nigerian state, including Northern Nigeria, has never spent one kobo in oil prospecting and oil producing, with funds other than from proceeds of petroleum products. The Nigerian Federal Government has at all relevant times been a beneficiary of the petroleum proceeds from the investments and activities of the oil multinationals." Professor Itse Sagay

CBN stinks as FRC open lid on financial malpractices, corruption - Vanguard News

CBN stinks as FRC open lid on financial malpractices, corruption - Vanguard News

"The CBN it said spent on promotional activities; N3.086 billion in 2012 up from N1.084 billion in 2011; even when the CBN does not have a competitor in Nigeria which may require a “fight” over brand and customer size. The figures are too high."

“Expenses on Newspapers, Books and Periodicals excluding CBN’s Publications is N1.678 billion in 2012; up from N1.670 billion in 2011."

"The CBN was gracious enough to reduce their “Legal and Professional Fees” from N20. 202 billion in 2011 to N0.460 billion in 2012. What could the CBN have had to spend N20.202 billion on in 2011? They also reduced their “sundries” unexplainable expenses from N1.197 billion in 2011 to N0.690 billion in 2012. One is at a loss why the CBN still carry “unexplainable expenses” and of this magnitude."

“The CBN also magnanimously reduced expenses on “Ethics and Anti-Corruption” from N34 million in 2011 to N18 million in 2012. This is an area that they are supposed to strengthen their activities and unearth unethical and corrupt practices. The CBN preferred to reduce their financing by almost 50 per cent. The CBN, outside the agreed audit fee of N300 million paid to their External Auditors and which was reviewed upward in 2012 from N200 million in 2011, the CBN showed within “Administrative Expenses” that they paid the External Auditors another N140 million."

“Within the “Administrative expenses” is an item they referred to as “Loan write-off.” This accounts for loans supposedly given to staff and written off thereafter. It came to a total of N3.855 billion in 2012. There is the need to review the Board approval for this loan write off if any."

"Within the “Administrative expenses” is an item they referred to as “Fixed Assets Clearing Account.” These are properties acquired by the CBN for which it does not expect to derive future economic benefits."

"These properties are written off by the CBN on a yearly basis. This came to N4.076 billion in 2012; up from N1.324 billion in 2011. This should not be mistaken for “Disposal of Fixed Assets Schedule."

OF VESTED INTEREST, SANUSI LAMIDO SANUSI, AND PETROLEUM SUBSIDY: MY VINDICATION

How vested interests are killing Nigeria - Sanusi - Vanguard News

Some Excerpts From the Governor's Speech as well as my Comments on the failed Subsidy Saga, posted Two Years earlier. We might have spoken to different audience, but the message remains the same.  

"... But the banking industry is just one part of Nigeria. What is happening in other areas?

Take the oil industry. We talking about fuel subsidy.

In 2009 this country paid $291 billion naira as subsidy for petroleum products. By 2011, this number had jumped to 2.7 trillion naira.

Did we start consuming 10 times as much petrol? Do we have 10 times as many cars? Did the population of Nigeria multiply 10 times?

I did not believe those numbers. I screamed against those numbers, and more people screamed, of course we tried to remove subsidy, there was occupy Nigeria.

There have been investigations, and what did we discover? That a lot of that money never went to fuel subsidy that was consumed by Nigerians. 
There are people in this country that produced pieces of paper and brought to PPPRA and somebody stamped those pieces of paper and said they brought in petroleum products and actually paid them subsidy. And those pieces of paper said I brought 30,000 metric tones on so so ship, and we discovered that the said ship was nowhere near the coast of Nigeria on that date.

We have seen vessels that did not even exist – that had been retired – on bills of landing and money has been paid. And you know what? None of them as I speak to you has gone to jail.
This is the only country in the world where you have something called oil theft. Where vessels can simply come and take crude oil and literally just drive out of the country. You see the numbers every day 100,000 200,000 400,000 barrels a day, nobody even knows. 7.3 billion naira.

How does anybody take oil in a vessel and leave the country? We’ve got the Navy, we’ve got NIMASA, we’ve got security services, you’ve got the oil companies themselves.

And every day we complain about the lack of development. We don’t have development because Vested Interests continue to rape this country and continue to take the money out.

And the only way you’re going to move from potential to reality it is stop preaching and start asking yourself how can we overcome the fear of Vested Interest and how can we confronts them?" - Sanusi  Lamido Sanusi - The Governor of Central Bank of Nigeria. January 12, 2014.

On May 09, 2012, I posted an article on this Blog, titled "A Misguided Judgment: How President Jonathan and His Advisers Squandered a Golden Opportunity." The following is an excerpt.

"Over the years, in spite the skepticism or suspended judgment that I have in the petroleum subsidy scheme in Nigeria, I have always resisted the temptation to engage myself in the arithmetic of the funding methodology for obvious reason: I hate Mathematics. Nevertheless, I am quite familiar with the basic principles of economics and strategic management. In similar vein, I have a good understanding of the fundamentals of subsidy as they relate to pricing and competitive markets.  Thus, it is reasonable to assume that when government intervenes in the market and help to defray cost of production or part of it, it makes the final product less expensive for the final consumers to buy than it would have been without the intervention or the subsidy. In the area of export, it enhances competitive edge in relation to similar products by other suppliers in the same market - foreign or domestic - because the subsidized products are cheaper to buy."

"Sadly, those assumptions do not hold water in our (Nigerian) domestic petroleum market in terms of availability and pricing. The more funding our government injects into the petroleum subsidy scheme, the more scare petroleum products remain and the more expensive the final prices are at the gas pump. In hindsight, what I take away from the petroleum subsidy scam in Nigeria is that before we condemn the usual suspect - international financial institutions that we love to hate - for allegedly recommending deadly economic pills as panacea for our sluggish economic growth, we must first ask ourselves whether the patients (African countries) administer the drug as prescribed by Doctor. "

"During the sit-in-protest that heralded the reported removal of petroleum subsidy by President Goodluck Jonathan in January this year, my concern was the long term implications of the removal. I supported the removal, believing in my mind that something is inherently wrong somewhere that is preventing us from reaping the reward of the subsidy. The inability of the administration and those before it to eliminate the loopholes in the regulatory framework, makes continuation of the subsidy economically imprudent."

"I made my position public in the social media, arguing that (1) if subsidy must exit, it should be handled by a separate and independent government institution and not private companies as presently the case, and (2) that it is economically unwise for Federal government to continue to subsidize importation of fuel on behalf of private companies, while they reap millions of dollars in profit. Finally, I made a reference to the current trends in the disbursement of student loans in the US, introduced by President Obama - an initiative that has saved the administration billions of dollars in student loans since its inception."  - Alex Aidaghese May 09, 2012. 

Below, you will find some of the posts on "Saharareporters" during the Subsidy protest in the First Week of January, 2012, where I advocated for the removal of petroleum subsidy. As at that time on January 05, 2012, the Farouk Mohammed's report was not yet out. I nevertheless, supported the removal, arguing that a continuation is economically stupid, because the subsidy is not reflecting on the prices of petroleum products in the country. None of the organizers of the protest match thought of that. I was alone. And I was right. Saharareporters is my witness. Mr. Sanusi Lamido Sanusi, the Governor of the Nigerian Central Bank, is echoing my position with unrestrained bravado publicly about two years later.  The only difference is that when I advocated for the removal, I argued that transferring the responsibility to government agencies would eliminate the large scale fraud perpetrated on NNPC by fraudulent individuals in the private sectors. Find below, my comments on Saharareporters during the protest match of January, 2012. 

In a news report by SaharaReporters.com, titled “Sorry Nigerians, But The Fuel Price Increase Has Come To Stay – Government” Published, January 4, 2012 - 21:40, I posted this comment.

Submitted by Hamiltonatlarge.blogspot.com (not verified) on January 5, 2012 - 16:12.

“Hitherto, in the US Uncle Sam used to provide grants and loans to university students through the banks – they guarantee the loan, while the banks reap the interest accruing from the loans. That is no longer the case, the Department of Education, through the Financial Aid Offices in all the universities now prepare the loans and grants and disburse them directly to students. If Uncle Sam and the Department of Education are to bear the cost and forbearance of the loans or in case of default by borrowing students, they should as well take advantage of the interest being paid on the loans by students.” “[Therefore], it is economically stupid for the Federal government [of Nigeria] to continue to subsidize importation of fuel for people in the private sectors, while they reap millions of dollars in profit.”

The following day, I posted a similar message on Saharareporters discussion board. I titled my shot piece, ‘There is Sense in the Removal.” In it, I urged President Jonathan to emulate President Obama’s new regulation in the disbursement and management of student loans in the US, adding that it is uneconomical for our government to continue the subsidy funding while private companies are in charge. 

Few minutes later, another blogger responded to my post, questioning the effectiveness of special advisers to the President in the subsidy debate. Below, you will find just the title of an article originally written by Dr. Reuben Abati for the Guardian Newspaper, while he was with the Guardian, but reproduced by Sahara Reporters to lampoon him, followed by my comments and that of another guy.

“We Shall Start Stoning The Economists In Official Corridors.” – By Reuben Abati In 2009 , but reproduced on January 5, 2012 - 01:34 by Sahara Reporters

See Part I and Part 11 of my post below:

"There is sense in the Removal" - Part 1

Submitted by Hamiltonatlarge.blogspot.com (not verified) on January 5, 2012 - 16:07.

"Hitherto, in the US Uncle Sam used to provide grants and loans to university students through the banks – they guarantee the loan, while the banks reap the interest accruing from the loans. That is no longer the case, the Department of Education, through the Financial Aid Offices in all the universities is now responsible for preparing the loans and grants and disbursing them directly to students. If Uncle Sam and the Department of Education are to bear the cost and forbearance of the loans or in case of default by borrowing students, they should as well take advantage of the interest being paid on the loans by students. 

It is economically stupid for the Federal government [of Nigeria] to continue to subsidize importation of fuel for the people in the private sectors, while they [the private sectors] reap millions of dollars in profit."

"There is sense in the Removal" - Part 2

Submitted by Hamiltonatlarge.blogspot.com (not verified) on January 5, 2012 - 16:06.

"What the Fed need to do therefore, is to transfer the importation to NNPC or government agencies, so that the profit going to the private oil importers, as published by Senate last year, should be going to the government. The money saved will be reinvested into the sector. That is the only way that the Nigeria people will benefit from the removal. Removing the subsidy and leaving the importation in the hands of the same private sectors, is economically disastrous."

Few minutes later, another blogger sent this feedback to Saharareporters, reacting to my post above.

Re: "there is sense in the removal."

Submitted by dere (not verified) on January 5, 2012 - 19:13.

“Your piece makes sense but what beats me is whether our so-called advisers don't drill deep to consider all options with a view to proffering the best option for the people and the nation! Why do we have special advisers who are not specialists in their field? May the Lord help us indeed!”

Amen. May the Lord help Nigeria indeed.

OF SENATOR DOMINGO OBENDE, ANTI-GAY LEGISLATION, AND PETROLEUM INDUSTRY BILL (PIB)

Culled from my Facebook Timeline - written January 22, 2014.
Senator Domingo Obende is the sponsor of the recently passed Anti-Gay Legislation. And he is from Edo State - one of the oil-producing states in Nigeria. At the moment, he is basking in ecstasy following the successful passage of that law. He has every cause to be in that mood - the Bill has the overwhelming support of Nigerians at home and abroad. Unfortunately, I did not celebrate the new legislation with the numerous supporters of the Bill. A few days ago, I made a not so complimentary remark about the Bill, and I was ferociously lambasted by friends and family members - including my nieces and nephews. I had to delete the comment and the entire thread because the language was becoming too incendiary. Bringing my son into the discussion, was, to say the least, disappointing. Nevertheless, I bear full responsibility for the outrage. 
A few weeks ago, I posted a comment here on my Timeline about the Petroleum Industry Bill (PIB) - a Bill that is presently languishing in obscurity in our National Assembly, because some Senators and Governors are not favorably disposed to a provision in the Bill that provides for oil-producing communities. As expected, there was no outrage from my friends and family members, except, of course, Owanlen Victor Amuakhagbon and my good friend, Godfrey Obetoh Ph.D. 

Petroleum is the mainstay of the Nigerian economy, and one would have thought that an Energy Bill designed to regulate the industry and makes life better for the communities that suffer the economic hardship and ecological hardship following spillage and pollution would receive an expedited hearing from our lawmakers. It did not. 

At this juncture, I would like to call on Senator Domingo Obende to show the same grace under fire that he enthusiastically displayed during the debate that culminates in the passage of the Anti-Gay Legislation. Nothing less is expected of the Honorable Law Maker. He is from Edo State, and Edo State is an Oil Producing State. 

If he is not aware of the PIB or its fundamentals, he should consult with lawyers in his Senatorial District - I can recommend some smart ones for him if he doesn't know any. 

Governor Babangida Aliyu of Niger State, a major adversary of the Bill, told us last year that they (Northern Governors) will first seek the counsel of professional lawyers before instructing their Senators on what line of action to take about the Bill. Given the lackadaisical approach displaced so far toward the Bill by legislators from the northern region, it is very easy to fathom the nature of the counsel they received or are receiving from the professional advisers hired by the Governors. 

Unfortunately, Southern Governors, as is always the case on important national issues, are in the wood - not knowing what to do next. And the PIB is dying slowly. As a reminder, I do not have a problem mentioning northern Nigeria or southern Nigeria in any of my essays. I am not calling for the dismantling of Nigeria. I am not labeling one region a parasite or blaming all our woes on northern Nigeria. And I am not one who, in an attempt to cast the image of a nationalist would pretend that all is well with our federalism or federal structure. All is not well. The earlier opinion leaders come forward with how they feel about the true stay of our federal structure the better. 

Truth is that most northern political leaders still relate to the southern region as if it is a conquered territory. And these are individuals holding national positions. Why can't we talk about them as well as the views they hold? Yes, we must talk about them, if this country must remain stronger as one. Let's dwell on what holds us together - those things that strengthen our resolve for one indivisible entity, our national image, and reputation - without blindly or timidly unmindful of their antics.
These are the drags. They are the problems and not the solutions. Above all, they are not for the talakawa, the almajiri and the poor fellows, but their interests and the interests of their immediate family. 

A few days ago, the loquacious Junaid Muhammad made pejorative statements about the Minister of Petroleum - mocking her for not being able to maneuver the PIB through the National Assembly for a successful passage. That is an outrage, to put it mildly. It isn't her Bill. It is our Bill - the people.

The Petroleum Industry Bill deserves a hearing - a positive hearing and swift passage. Because the Industry (oil and gas) is what is holding Nigeria together. Senator Obende and his colleagues should step forward and do the right thing. Bamboozling gullible Nigerians, as our lawmakers and political leaders always do, with issues that bear the least relevance to their social and economic emancipation is as nauseating as the image they made of gays and lesbians. 

I wrote about six thousand words essay on the PIB a few weeks ago. That essay is available here on my  Facebook Timeline and at my Blog. That's all I can do for now. Thank you.