“Shocking but not a surprise.” That’s the view of our correspondent in Nigeria following a report on the scale of corruption in the Nigerian oil industry. The country’s auditor general has reported that the state owned oil company, the NNPC has failed to hand over sixteen billion dollars to the government.
It doesn’t come as a surprise to me. The Nigerian National Petroleum Corporation NNPC has had governance problems for decades. The figures that we learned about yesterday came from 2014. And that was the year before an election. So the patronage agendas were probably even higher than usual. And NNPC is the best place to go or looking for loose money.
Yeah, I mean, loose money is one thing. Sixteen billion dollars is an extraordinary amount.
It is. I mean, it’s important to understand sixteen billion dollars wasn’t necessarily stolen.
This is a big amount of money that should have been transferred from the National Oil Company to the government. Some of it was spent on oil sector related activities. Some of the other loses are accounted for because the company signed bad deals. And many times, those bad deals were signed with favored private companies. This happened under a government that was using oil sector for its own corrupt purposes?
How much has changed then with the new president Muhammadu Buhari?
I’m much more optimistic now but the key problems with the NNPC are still in place. There are no clear rules that govern how much money the company should keep versus how much it should transfer back to the government. And that problem still exits today.
There’s still no clear rules. It’s going on to a lesser extent now in part because the government seems to be committed to good governance and fighting corruption but also because the oil price is so much lower.
So there’s a lot less money sloshing around. But what we want to see is a clear restructuring of NNPC to get rid of all this grey area and confusion where this kind of corruption tends to happen.
How far do you think that oil has been for Nigeria a bit of a curse in that it has lubricated a whole culture of corruption?
Oil has not been a blessing for Nigeria. And we see that now with the oil prices being so low that the non-oil economy is very small and it’s very weak. It’s not enough to support the huge population of a country like that.