Today is the 5th day of our ongoing civil protest against the oppressive policy of the Federal Government as they feed fat on our resources while expecting the citizens of our nation to fast and pray, and at the same time try hard to remove the crumbs the poor depend on for survival.
I salute all Nigerians and our compatriots for making the rallies as peaceful as they have been. From the first day till now, our watchwords remain: NO REVENGE, NO REPRISALS, NO RAGE, NO RESENTMENT, AND NO VIOLENCE even in the face of provocation and unimaginable threats.
Across the nation and on so many TV stations, serious advertisements are being aired to stir up the people against us, while news coming from the Freedom Park, Ojota is being censored, though the crowd is being shown.
We are not unaware of the tendency of authoritarian regimes to use manufactured ‘public opinion’ to diminish their own role as they react to the very passions they have created in their people. We know that when the arrow of truth shoots, there will be no traces of falsehood. In spite of the lying propaganda, it is part of our responsibility to channel our collective energies in the right direction and remain focused on the main issues rather than using ‘ring worm’ medicine to cure leprosy.
I have four (4) major pieces of information to share with you this morning:
CRITICAL INFORMATION 1 is predicated on the little painting hung on the wall of my primary school’s auditorium: ‘Honesty is the best policy: Tell the truth and let the devil be ashamed.’
Time has come for the government to tell the whole truth to the citizens of this country in respect of fuel subsidy.
I will share with you the information we have on the Fuel Subsidy Payouts in 2011:
Fuel Subsidy Pay-Outs in 2011 were Fraudulently to Cronies:
- The purported expenditure of between N1.4 and N1.6 trillion on ‘subsidizing’ PMS and Kerosene is indefensible and at least three quarters of the amount is fictitious, fraudulent and grand corruption.
- The amount budgeted in 2007 for subsidizing ALL imported refined products (petrol, diesel, kerosene, and aviation fuel) was about N300 billion. In 2011 the amount earmarked was N240 billion – an average of N20 billion a month as FG’s contribution towards the import price subsidy deductions for petrol and kerosene. Diesel had been “deregulated” since 2008, with little improvement in price, supply chain stability and quality. Where did those ‘savings’ go?
- The deductions went up six times in the months just before and after the elections due to fraud perpetrated by the products’ importers in collaboration with officials of NNPC, PPMC, DPR, PPPRA and Petroleum Equalization Fund.
- Prior to this, the NNPC had been making other deductions from oil revenues before remittance to the Federation Account which the FMF and State Finance Commissioners had been disputing. Two audit firms – KPMG and S S Afemikhe & Co. were contracted by FMF to “undertake a process and forensic review of NNPC, claims of indebtedness against the FGN by NNPC, and Review of Petroleum Product Subsidy Processes.”
- The two audit firms submitted their report to the FMF in the third quarter of 2011. The current ministers of Finance, and Petroleum Resources and the Presidency are fully aware of the key findings and recommendations which I will highlight.
- Revenue leakages from Federation Account estimated at about N800 billion and their sources were identified for immediate corrective actions by FG.
- Revenue leakages estimated at N1.2 trillion from the downstream sector operation of the NNPC including the “subsidy system” were also identified and reasons given.
- The leakages largely arose because of the multiple and conflicting roles of the NNPC as agent as well as customer of the government of the Federation, enabling it to play games to the disadvantage of FG and the State governments. NNPC also makes claims against the FGN that no one is in a position to independently substantiate and verify.
- At a period of generally high oil prices, about N1.6 trillion was paid as subsidy between January 2007 and June 2010, representing an annual average cost of N460 billion to the federation – i.e. FG and 36 state plus FCT! Why did it become N1.6 trillion in 2011 alone. What parameters changes? None.
- The top ten marketers received 80% of the subsidy paid during the period. They are MRS (Sayyu Dantata), Oando (Wale Tinubu), African Petroleum/Zenon (Femi Otedola), Folawiyo Energy (Tunde Folawiyo), Aiteo Energy, Rahmaniyya (Yar’Adua’s In-law To Be), Northwest Petroleum, Total, Sahara Energy (Tonye Cole) and Conoil (Mike Adenuga).
- About 36% of purported stocks of refined and imported products for which subsidy of N296 billion was paid between 2007 and 2009 were questionable, and not available for sale to the public (i.e. non-existent!). The demurrage paid of US $198 million during the period was equally questioned. The Auditors provided the names of the companies involved in the imports, storage and demurrage issues. They include Addax, Sahara, MRS and Oando, among others.
- Some product importers/marketers might have claimed subsidies using bills of lading with apparently altered dates (Lloyd, Dee Jones and Rahmaniyya). Pinnacle, and Sahara Energy got paid subsidies with questionable documentation. Mobil, Vitol and Northwest were thought to have claimed subsidies in spite of issues with their documentation, with FG losses estimated at nearly N5 billion.
- The auditors identified and named 27 companies that apparently got overpaid subsidies by nearly N25 billion between January 2007 and June 2010. The minimum expected of FG here is to recover the money and prosecute the accessories to the overpayment.
- The auditors made many recommendations to remedy the problems identified, the most fundamental being the need to enact the Petroleum Industry Bill to lay the solid foundation for the deregulation of the oil and gas industry.
The point is that there has been a systemic infrastructure of fraud, corruption and impunity in the fuel subsidy regime and everyone is aware who the potential and actual culprits are. An audit report has identified them.
· Why are they not being investigated, funds recovered and prosecuted?
· Is it easier to impose a tax on 167 million Nigerians than to deal with a handful of rich fat-cats?
This is a governance issue not one about economic policy only.
Leaders unwilling to sanction their friends are not fit to lead.
Leaders that rush to punish ordinary citizens for the fraud and greed of their friends are even worse.
This administration has exhibited both negative tendencies. We must go beyond the subsidy debate and demand accountability and good governance in public life. No more, no less.
We hereby call on the National Assembly to investigate the N1.3 trillion unappropriated funds paid out as subsidy in 2011, as admitted by the Federal Government, and take all the necessary actions to stop this haemorrhage in our economy before the nation bleeds to death.
CRITICAL INFORMATION 2
Budget 2012 contains Waste and conveys Wrongful Spending Priorities
1. The budget of N4.749 billion assumes an oil price benchmark of $70 a barrel, oil production of 2.45 million barrels per day and zero deduction from Federation Revenues for the fuel subsidy.
2. Yet, the budget contains a deficit of 2.77% of GDP. (The nominal GDP has been estimated by National Bureau of Statistics (NBS) to be about N36 trillion in 2011), so essential about N1 trillion of the budget is to be borrowed, or relies on exceptional income like privatization proceeds, loans and grants-in-aid.
3. Accordingly, out of the capital budget proposal of N1.32 trillion, only about N300 billion will be available from our federal revenues. If the “subsidy” is not withdrawn, the deficit will be even higher and the FG would then contravene the 3% cap on deficit in the Fiscal Responsibility Act 2007.
4. None of the so-called SURE projects have any NEW source of revenue to finance them other than what have been described above UNLESS:
(1) the oil price benchmark is raised above $70 or
(2) the Naira-Dollar exchange rate allowed to slide thus raising more Naira for the government.
Some examples of wasteful spending decisions are itemized below:
5. A review of the budget provisions of 21 out of 50 Ministries, Departments and Agencies revealed the following amounts for some recurrent and capital expenditure items:
· Travel – local and international N13 billion
·Stationery, Magazines, Newspapers, etc. N4.5 billion
·Maintenance of vehicles, furniture, etc. N17 billion
·Training N5 billion
· Fuel and Lubricants for cars, generators, etc N4 billion
· Miscellaneous: welfare packages, refreshments, meals, etc N9 billion
· Acquisition of Computer Software N2.5 billion
· Research and Development: whatever that means! N27 billion
6. The actual provisions in the budget would be at least twice these amounts, and total about N160 billion of waste. This amount is equal to the amount budgeted for the power sector!
7. Some examples of some of the wasteful spending under “Research & Development” are N2.498 billion for “citizen’s call centres” under the Ministry of Communications & Technology, N1.2 billion in the Ministry of Agriculture to incorporate commodity marketing companies! The Ministry of Foreign Affairs wants to spend N322 million to acquire “computer software”. This is very expensive software indeed!
8. A lot has already been written about the budgets in the Presidency. The following are some weird examples of what has been included in the State House (Villa) budget:
9. Overhead is about N7.2 billion, or about N20 million per day to keep our President and VP happy. Their local travel budget is N724 million or N2 million per day, including weekends, while their international travel budget ix N951 million or nearly N3 million per day.
10. The president’s office has N285 million to hand out as “welfare package”, N265 million to buy computers, N150 million to buy scanners, N161 million for buses, N295 million for new furniture, and N1.8 billion to “maintain existing furniture, office and residential quarters”.
11. The intend to buy desktops for N300,000 each, laptops for N314,000 each and scanners for a whopping N190,000. The public address system in the President, VP’s office and Banquet Hall will cost N150 million! The SGF wants to spend N65 million on tree planting. Note that planting a million trees in Abuja over 4 years cost the FCT Administration less than N50 million then!
Conclusion: There is a lot of waste, and misplaced spending priorities in the Budget which can be reviewed to free more funds to finance subsidies, capital investment and improved governance.
CRITICAL INFORMATION 3
Thursday, January 12, 2012 - Eso calls for withdrawal of NASS constituency allowances
A former Justice of the Supreme Court, Justice Kayode Eso (retd), has said the constituency allowances of the National Assembly members should be stopped while the bogus allowances of the executive arm of government should be drastically reduced to provide funds for provision of infrastructure and other social services for the masses.
If implemented, he said, there might not be a need for fuel subsidy withdrawal.
In a telephone interview on Wednesday, he said the money that would accrue from the constituency allowances and the executive allowances could be enough to sustain fuel subsidy.
Eso stated that constitutionally, members of the National Assembly should not be involved in the execution of projects in their constituencies, adding that the allowances of the executives were astronomically high.
He said the Federal Government and Nigeria Labour Congress and Trade Union Congress should go into the ‘root cause’ of lack of provision of basic amenities instead of fighting over subsidy withdrawal.
Eso said, “The allowances of the executives are incredible. They are more than the subsidy that are given to us for fuel. They should remove all the allowances. This is the time to look into everything and everybody will be happy
“They should remove the subsidy (i.e. constituency project funds) being given to the National Assembly. They have no right to have them. They are there to make laws and not to become contractors. The governors are there to take care of their states. If we have all that money, there will be less demand for subsidy to go.
“The governors are the people to do the project. Legislators have no right to do any project. We voted them in to make laws and not to execute projects. Who gave them assignment to execute projects? The Constitution does not permit them to do that. It is not part of their work. Their only work is to make laws and that applies to all legislators all over the world.”
Eso urged the Federal Government and the labour to holistically address issues hindering development in the country.
He said the problem of lack of infrastructure and good governance transcended fuel subsidy removal.
According to him, this is the time to fix Nigeria and tackle those challenges and concerns that have retarded national growth.
“What is important is that the Federal Government should go into the root of the whole matter. Why do we need the money when there is money somewhere that should not be there? We should find out the amount the subsidy will yield, how much are the members of the National Assembly taking as constituency allowances. We should find out that and see whether removal of subsidy is necessary at all.
“The immediate solution is for labour and FG to meet immediately and go to the root and not the surface. What they are attacking is just the surface.”
CRITICAL INFORMATION 4
We welcome the decision of PENGASSAN to shut down the oil wells by midnight tomorrow, Saturday. On our part, we will give you further information on our strategy before the close of today. Let it be clear to those who underestimate the will of our people and their resolve to kill corruption instead of allowing themselves to be killed by corruption, that there is no army strong enough to kill an idea whose time has come. Nigerians from all walks of life have regained their voices. We will, by God’s grace, continue and sustain this protest until the government sees reason to revert to N65.00.
NO RETREAT, NO RE-THINK & NO SURRENDER. WE ARE PERSUADED THAT WE SHALL OVERCOME BECAUSE ‘THE TRIUMPHING OF THE WICKED IS SHORT AND THE JOY OF THE HYPOCRITE IS BUT FOR A MOMENT’ (Job 20:5).
Thank you. God bless you and God bless Nigeria.