I doubt that Sanusi Lamido Sanusi, the former governor of the Central Bank of Nigeria (CBN), will apologise to Nigerians for apparently mistakenly alleging that the Nigerian National Petroleum Corporation (NNPC) failed to remit colossal amounts of oil revenue to the treasury between January 2012 and July 2013. But it is the case that a forensic audit of the NNPC conducted by the global accountancy company PriceWaterhouseCoopers released in April found that the corporation did not withhold money but actually overpaid the state.
Mr Sanusi said in a letter to President Goodluck Jonathan in September 2013 that over the 19 month period state-owned NNPC lifted US$65bn worth of crude oil on behalf of the government but remitted only US$15.2bn revenue, leaving US$49.8bn unaccounted for and outstanding. Media reports of the then CBN governor’s astonishing assertion fuelled speculation that almost US$50bn of public money had gone missing, no doubt pocketed by corrupt politicians, government officials and NNPC administrators. After the NNPC disputed the allegation, Mr Sanusi in December lowered his estimate of the shortfall to US$12bn. Later in February 2014 he told the Senate it was US$20bn that the NNPC needed to account for.
This saga of the missing oil money raises a number of questions. How and why did Mr Sanusi, an international award winning central banker, get his revenue figures so wrong? Why was he able to maintain his credibility even though he revised his allegation at least twice? Why was the public so ready to believe that the national oil company stole such a huge sum of money?
From the start it should have been clear that the claim that US$49.8bn was missing from the state coffers was improbable. This would have amounted to a loss of US$2.62bn a month or US$31.45bn for the whole of 2012. Nigeria’s entire gross federation revenue in 2012 was about US$65bn, including both oil and non-oil incomes. It was far fetched to think that almost half of the state’s total income could go missing from a single source of leakage. If it were true, how much money would have been available to pay for the running of the bureaucracy, fund capital projects, service debts, maintain subsidy payments and other real government expenditures, when account is also made of revenue losses through other leakages, such as numerous embezzlements by non-oil related federal and state officials?
The fact that the PriceWaterhouseCoopers audit exonerated the NNPC of the specific charge of not remitting oil money does not mean the state corporation is fit for purpose – it is not. Indeed, the report criticised the way the NNPC operates and recommended an urgent restructuring. It also stated that the corporation should refund to government US$1.48bn due from unsubstantiated costs, duplicate subsidy claims and computation errors made in its upstream operations.
The missing oil money saga showed that the management of Nigeria’s finances is so lacking in transparency that major agencies of the state have very different information on public revenue flows. This opaqueness has led to publications of various reports in recent years that allege grand scale corruption in Africa’s largest economy. These headline grabbing allegations have not served to make the public more aware of the operation of corruption in the oil business but have made people more accustomed to the notion that their country is losing staggering sums of revenue from the nefarious activities of those in power.
It seems that people are reconciled to the existence of grand graft. How else can we explain why an allegation by the central bank, believed by many to be true, that nearly half or a quarter of state revenue had disappeared did not trigger street protests but mainly fatalistic resignation? In most other countries such a controversy would not been limited to the pages of newspapers. Trade unions and other civil society organisations would have been up in arms demanding accountability and for heads to roll.
The current state of public consciousness in Nigeria with regards to corruption does not act as a deterrent against routine abuse of power in the country. On the contrary, it encourages complacency with regard to relatively smaller levels of theft and misappropriation of public resources that is the real problem facing the country. With frequent headlines of billions of petrodollars being misappropriated, the siphoning of millions by many different officials and theft of a few thousand barrels of crude may seem unremarkable and go almost unnoticed. But the reality is that corruption is the daily theft of money from many different sources which individually amount to thousands or millions of dollars and when aggregated add up to a colossal loss of potential resources for development.
Spurious allegations of super scale thefts of oil revenue also encourage the belief among ordinary people that the government is loaded with money and the failure of the country to achieve rapid development is simply due to the mismanagement of oil windfalls. The thinking is, if the loss of a quarter to a half of federation revenues to corruption between 2012 and 2013 did not result in the collapse of the state system, this surely indicates that Nigeria is buttressed by huge financial reserves. Of course, this is not the case. The problem is not that governments have plenty of money which they poorly manage; rather it is that they mismanage very scarce resources.