How billions of dollars are being withheld from the Federation Account, by Falana

Activist lawyer Femi Falana (SAN) says billions of naira are being withheld from the Federation Account. He spoke yesterday in Abuja at a summit on the 2nd anniversary of the whistle-blower policy of the Federal Government. Excerpts from his speech:

Two years ago, the Buhari administration adopted the Whistleblower policy as a component of the fight against corruption. The introduction of the policy was sequel to the deliberate refusal of the National Assembly to pass the Whistleblower Bill sponsored by some legislators in 2007. Like the Treasury Single Account (TSA) and Bank Verification No (BVN), the Whistleblower policy is said to have assisted the Federal Government to recover huge public fund which had been cornered by a few corrupt individuals and corporate bodies.

But apart from beating its chest for the success recorded so far in the implementation of the TSA, BVN and Whistleblower policies, the trillions of Naira which have been saved or recovered by the Federal Government have not been deployed to arrest the increasing wave of poverty in the land. However, in marking the second anniversary of the Whistleblower policy, it is pertinent to point out that what has been recovered so far is a tip of the iceberg as the Buhari administration has not acted on the information at its disposal in respect of the billions of dollars being withheld from the Federation Account.

On March 8, 2016, I requested the Minister of Finance to embark on urgent and decisive measures to recover not less than $200 billion. Apart from assuring me, rather politely, that my request was receiving attention the detailed information contained in my letter has not been processed either by the federal ministry of finance or federal ministry of justice. Since my letter was widely published in the media it has generated reactions from some quarters. With particular reference to the allegation that the Central   Bank of Nigeria gave out a bail out of $7 billion to 14 commercial banks in 2006, Professor Charles Soludo who was then the governor of the bank, said it was not a bail out but a deposit. Since the fund was illegally removed from the nation’s foreign reserves without appropriation by the national assembly and placed as a deposit in the banks it ought to be recovered together with the accrued interests. And based on information which I had obtained from the National Extractive Industry Transparency Initiative (NEITI), I reported that the NNPC had withheld the sum of $20 billion from the federation account.  From the 2015 audit exercise conducted by NEITI the figure has increased to $22 billion and N376 billion.

In a petition, which I sent to the Presidential Panel on Recovery of Public Property last year, I accused Exxon Mobil of paying $600 million out of the $2.5 billion fixed by the Nigeria National Petroleum Corporation for the renewal of 3 oil blocks in 2009. Even though the oil company claimed to have paid the outstanding balance of $1.9 billion, there is no evidence of such payment. It is hoped that the Presidential Panel will pursue the matter to a logical conclusion

However, the most interesting reaction to my letter came from Dr. Ibe Kachukwu, the Minister of State in the Ministry of Petreum Resources. He concurred with me that the nation had lost not less than $60 billion due to the failure of some public officers to implement the provisions of the Deep Offshore and Inland Basin Production Sharing Contracts Act. Section 16 of the Act provides that the royalties paid by oil companies shall be adjusted upwards whenever the price of oil rose beyond $20 per barrel. Since there was no reason adduced for not enforcing the law for 18 years the authorities of Akwa Ibom, Bayelsa and Rivers State governments dragged the Federal Government to the Supreme Court to justify why it has refused to implement the law. In a judgment delivered by the apex court on October 18, 2018, the Federal Government was ordered to take urgent steps to recover all revenues lost to oil and gas exploring and exploiting companies due to wrong profit sharing formula termed as the Production Sharing Contracts since 2003. It is hoped that the Federal Government will proceed to recover the sum of money estimated to be in the region of $1 trillion.

I must not fail to acknowledge that the Economic and Financial Crimes Commission has commenced investigation into the allegation of crude oil stolen from the country by well known international oil and shipping companies.  For instance, it has been confirmed that 60.2 million barrels of crude oil stolen from Nigeria between 2011 and 2014 were discharged at Philadephia port in the United States. If the investigation can be painstakingly conducted it is estimated that not less than $300 billion could be realized as the costs and penalties for the oil stolen from Nigeria and discharged in several ports in the United States, China, India, United Kingdom, France etc.

In view of the foregoing, we challenge the Federal Ministry of Finance  to proceed to recover the huge funds highlighted in my letter.

I can assure the Federal Government that I do not intend to demand payment of any percentage from the fund to be recovered based on the whistle that I have blown which has been ignored. Having regards to the fact that the public and private organisations that have been fingered in my letter are very powerful and vested the federal government cannot muster the political  will to recover the fund that has been withheld from the federation account.

Therefore, the Nigerian people who stand to benefit from the judicious deployment of recovered loot should be mobilised by the progressive extraction of civil society organisations to take over the fight against corruption.