Making Nigeria Work for Its People -By Femi Falana

Filed under: Democracy & Governance |
Femi Falana

Femi Falana

 

Introduction

Nigerians recently voted for the All Progressives Congress (APC) because it promised to change poverty to prosperity, tackle insecurity of life and property, combat impunity and corruption, restore the rule of law and encourage transparency in governance, and to end the isolation of the country in the international community. On account of the ideological orientation of its leadership, the APC promised to promote a private sector-led economic system.

Since the inauguration of the new administration two months ago, President Muhammadu Buhari has been under pressure to embark on the immediate removal of fuel subsidy, the further devaluation of the national currency and the complete take-over of the economy by market forces. In order to hide the cause of the underdevelopment of the nation, the fall in the price of crude oil in the international market has been blamed for the virtual collapse of the neo-colonial capitalist economy.

In this presentation we shall review the bailout granted to state governments by President Buhari for the payment of the arrears of salaries of workers owed by many state governments. We shall equally review the renewed fight against official corruption and impunity in the country. In conclusion we shall call on the Nigerian people to demand for the implementation of the provisions of the Fundamental Objectives and Directive Principles of State Policy outlined in Chapter II of the Constitution, in relation to the duty imposed on the government to promote the happiness and welfare of the citizenry.

Recovery of Looted Wealth

No doubt, the avowed commitment of President Buhari to fight corruption and end impunity in the country has attracted the goodwill of the international community. Apart from his invitation to attend and address the last meeting of the G7, President Buhari is currently on tour of the United States on the invitation of President Obama. Before then, Nigeria had hosted the meeting of her neighbours in the renewed fight against terrorism. To a large extent, the pariah status of the country may be said to have ended.

At the meeting of the G7, President Buhari pleaded with the leaders of global capitalism to collaborate with Nigeria in fighting terrorism and in fixing its comatose economy. Convinced that the destiny of the nation lies in the hands of Nigerians, I pleaded with President Buhari to look inwards. In particular, I suggested that Nigeria should reject any bailout and make a strong case “for the repatriation of our looted wealth in the vaults of western banks”. Happily, President Buhari has requested the Obama Administration to assist in the repatriation of about $150 billion looted from the public treasury in the last decade.

Under the new Act, the granting of stay of proceedings and other delay tactics have been banned in the trial of criminal cases. Accordingly, a criminal trial shall be concluded within six months, unless there are exceptional circumstances which may prolong any trial beyond that period.

Since the war against official corruption commenced under the Buhari Administration, corruption has decided to fight back in a vicious way. Apart from attacking the leadership of the Economic and Financial Crimes Commission (EFCC), the regime has been accused of engaging in dictatorial and authoritarian tactics by the few unpatriotic elements who have stolen the country dry. While the decision of the federal government not to interfere in the work of the anti-graft agencies is a welcome development, the National Assembly should forward to President Buhari for his assent the Witness Protection Bill and the Whistle Blowers’ Bill. The National Assembly deserves commendation for enacting both laws together with the Administration of Justice, 2015.

Under the new Act, the granting of stay of proceedings and other delay tactics have been banned in the trial of criminal cases. Accordingly, a criminal trial shall be concluded within six months, unless there are exceptional circumstances which may prolong any trial beyond that period. Indeed, the elevation of trial judges to the Court of Appeal will no longer lead to fresh trials before other judges, as such judges will be given the fiat to conclude partly heard matters.

…since 1994, all successive regimes in Nigeria have waged a war against corruption. It was the Sani Abacha junta that enacted the Fialed Banks Decree and the Advance Fee Fraud Decree to deal ruthlessly with bank fraud and the offence of obtaining money by false pretences.

Those who are opposed to the renewed fight against corruption have begun to accuse President Buhari of waging a persecution agenda. While urging the anti-graft agencies to ignore such campaign of calumny, it is germane to remind Nigerians that since 1994, all successive regimes in Nigeria have waged a war against corruption. It was the Sani Abacha junta that enacted the Fialed Banks Decree and the Advance Fee Fraud Decree to deal ruthlessly with bank fraud and the offence of obtaining money by false pretences. The Pius Okigbo-led probe of the mismanagement of the Central Bank instituted by the junta revealed that $12.2 billion in the Dedicated Accounts was misappropriated by his predecessor and comrade-in-arms, General Ibrahim Babangida.

Following the death of the maximum dictator, General Abacha on June 8, 1998, his successor, General Abdulsalami Abubakar ordered investigation into the grand looting of the Central Bank of Nigeria from 1993-1998. At the end of the probe it was established that the late military ruler stole about $5 billion from the vaults of the CBN through his National Security Adviser, Mr. Mohammed Gwazo. The said stolen fund has since been traced to over 140 bank accounts in western countries and some remote islands in the world. Based on report of the investigation, the federal government recovered funds and property worth over $1 billion from the family and associates of General Abacha. The forfeited assets were promulgated into law by General Abubakar on May 26, 1999. Upon our request under the Freedom of Information Act, the immediate past Secretary to the Federal Government, Senator Anyim Pius Anyim confirmed that the said funds and assets had been forfeited to the federal government.

Upon the restoration of civil rule in May 1999 the Olusegun Obasanjo administration embarked on the recovery of the remaining Abacha loot. Contrary to the misleading information of the then Minister of Finance, Dr. Ngozi Okonjo-Iweala, that only $500 million was recovered under her watch, we have established that the Government of Switzerland assisted Nigeria to recover $700 million which was handed over to the federal government, while another sum of $350 million was recovered from family members and business associates of General Abacha in respect of the Ajaokuta contract scam. It has also been revealed that the proceeds from the sales of shares of the late dictator in a refinery located in Sierra Leone worth $450,000 were forfeited to the federal government at the material time.

During the recent electioneering campaign, President Jonathan boasted that his administration had fought corruption more than previous regimes. He therefore warned Nigerians not to vote for General Buhari as he was likely to jail corrupt people. As Nigerians actually wanted corrupt people jailed they decided to vote for the retired General.

It is on record that the recovery efforts of the federal government continued under the Goodluck Jonathan administration. In justifying the withdrawal of the criminal charges filed against Mr. Mohammed Abacha over his role in the diversion of the stolen funds, the Federal Ministry of Justice disclosed, sometimes last year, that another sum of $970 million had been recovered from the Abacha loot. Shortly thereafter, the United States’ Government announced that it had recovered the sum of $458 million from the same Abacha loot. The said sum of $458 million has not been repatriated to Nigeria for obvious reasons.

During the recent electioneering campaign, President Jonathan boasted that his administration had fought corruption more than previous regimes. He therefore warned Nigerians not to vote for General Buhari as he was likely to jail corrupt people. As Nigerians actually wanted corrupt people jailed they decided to vote for the retired General. In fairness to President Jonathan, the fight against corruption under his regime recorded some success. Apart from an ex-governor who escaped the arrest of the EFCC only to be arrested, tried and jailed abroad, the era witnessed the conviction of a few influential people who were convicted for stealing billions of Naira but asked to pay ridiculous low fines. Indeed, the regime charged Mr. Dick Cheney, a former Vice President of the United States and the Nigerians who were indicted in the Halliburton scandal even though the cases were struck out for want of diligent prosecution.

The Call for Probe of the NNPC

The APC recently called on President Buhari to investigate the missing sum of $4.1 billion paid by the Nigerian Liquified Natural Gas (NLNG) company but which was never remitted to the Federation Account by the Nigerian National Petroleum Corporation (NNPC). With respect, the call is totally uncalled for in view of the unchallenged audit reports of the Nigerian Extractive Industries Transparency Initiative (NEITI) on the subject matter. In its 2013 annual report, the NEITI disclosed that “NNPC holds 49% share of NLNG on behalf of the Federation. So far NNPC has reported receipt of $3,789,107,000 as dividends from NLNG for the years 2006 – 2008. However, NNPC did not confirm remittance of the money to the Federation Account. Financial flows from NLNG include dividends and loan repayments which sum up to $4.84 billion was received by NNPC during for 2006-2008 audit. This is in addition to the $3.996 billion reported to have been received in the previous audit reports totaling $8.836 billion. The report confirmed that the funds received by NNPC were not remitted to the Federation account.”

I am aware that the National Economic Council has constituted a team of four governors to inquire into the funds being withheld by the NNPC. Disturbed by the alleged monumental corruption associated with the NNPC, Governor Nasir El-Rufai has called for the liquidation of the body.

NEITI reiterated the finding in its 2014 annual report when it stated that “NEITI audit reports have confirmed that the sum of $8.836 billion has been received by NNPC but not remitted into the Federation account as required by law.” During a recent visit to President Buhari, the NEITI Board members pleaded with him to ensure that the sum of $19.3 billion including the NLNG fund was remitted to the Federation Account by the NNPC. I am aware that the National Economic Council has constituted a team of four governors to inquire into the funds being withheld by the NNPC. Disturbed by the alleged monumental corruption associated with the NNPC, Governor Nasir El-Rufai has called for the liquidation of the body. With respect, it is the interpretation of a section of the law setting up the NNPC which ought to reviewed. According to the Governor, “the NNPC only remitted 58 percent of the monies earned between 2012 and the first half of 2015. A company with the audacity to retain 42 percent of a country’s money has become a veritable paralled republic!”

Incidentally, when the deductions from the proceeds from sale of public assets was challenged in the case of Attorney-General of Ogun State v. Attorney-General of the Federation (2002) All NLR 27. It was unanimously agreed by the Justices of the Supreme Court that “Section 20 of the Public Enterprises (Privatization and Commercialiation) Decree No 28 of 1999 provides that the Bureau of Public Enterprises shall establish and maintain a fund from which shall be defrayed all expenditure incurred by the Bureau… By section 21 subsection (2) of the Decree the Bureau shall cause the net surplus of receipts and payments made to it in every year to be paid to the Government of the Federation.”

The NNPC has continued to insist that the fund not remitted to the Federation Account is the “expenditure incurred” in the course of its operations. Instead of liquidating the NNPC, those who are justifiably critical of the huge fund unilaterally deducted from the revenue generated by the NNPC before remitting the remainder to the Federation Account should demand that the budget of the corporation be appropriated by the National Assembly. Another agency of the federal government which approves its own budget is the Central Bank of Nigeria (CBN). The CBN believes rather erroneously that its autonomy granted by the Act setting it up does not allow the National Assembly to appropriate its budget.

…the Central Bank Board has continued to approve the budget of the bank without reference to the National Assembly!

In the case of Dr. Uzor Ikebudu v. Central Bank of Nigeria (Unreported Suit No: FHC/L/CS/343/2013) wherein the Plaintiff sought declaratory reliefs to compel the Defendant to submit its budgets from 2007-2013 to the National Assembly for appropriation. In opposing the suit the Defendant relied on the independence of the Central Bank of Nigeria by virtue of Sections 1, 5, and 6(3) of the CBN Act, 2007; section 35 of the BOFIA Act, and Section 22(1) of the Fiscal Responsibility Act, 2007. The Federal High Court (Per Saliu Saidu J.) agreed with the Defendant that the action was statute barred with respect to the budgets for the past years of 2007 – 2013 but held that “There is no doubt in my mind that the legislature intended that the CBN must submit its budget to the National Assembly through the Minister of Finance for proper appropriation.”

The reliefs were however granted by the learned trial judge. With respect to the Plaintiff’s claim for damages in the sum of N10 million, the court awarded N5 million damages and granted a perpetual injunction restraining the Defendant from further failing or refusing to submit its budget to the National Assembly for appropriation on a yearly basis. But the Central Bank Board has continued to approve the budget of the bank without reference to the National Assembly!

Removal of Fuel Subsidy

The call for the removal of fuel subsidy is an indirect call for increase in the official prices of petroleum products. While I agree that the over N900 billion earmarked for fuel subsidy annually ought to be saved for development, it ought to be realised that the importation of petroleum products was caused by the federal government which failed to maintain the country’s four refineries and build new ones. In 2011, the National Assembly appropriated N245 billion for fuel subsidy. Without any amended appropriation, the then Finance Minister, Dr. Mrs Ngozi Okonjo-Iweala paid out N2.5 trillion to oil marketers. The illegal payment should be reviewed and sanctioned while the companies which never imported or supplied any fuel should be made to refund the money obtained from the federal government under false pretences.

The federal government should recover the billions of dollars set aside for the so called Turn Around Maintenance of refineries since 1999.

It would be recalled that following the popular agitation against the removal of fuel subsidy in 2012, the Ministry of Petroleum Resources announced that the federal government had decided to set up 30 green field refineries. The policy was jettisoned due to pressure from the cabal of fuel importers. In 2013, the federal government obtained a loan of $1.6 billion for the maintenance of the country’s four refineries. As the fund was diverted the refineries can only refine about 80,000 barrels per day, instead of 445,000 barrels earmarked for domestic consumption. The federal government should recover the billions of dollars set aside for the so called Turn Around Maintenance of refineries since 1999.

As a matter of urgency the monopoly in the importation and sale of diesel should be stopped. There is no basis for the monopolistic control of goods and services under a free market economy.

However, due to the ongoing fuel crisis in the country, the Directorate of Petroleum Resources (DPR) has invited fresh bids for the setting up modular refineries. If the policy is genuinely pursued, the federal government can establish many of such refineries within the next 12 months. According to the DPR, each of the refineries is estimated to cost between $1million and $15 million. African countries like Senegal, Zambia, Niger, Chad, Gabon and Cameroon operate similar refineries with capacity to refine between 20,000 and 40,000 barrels of crude oil per day. If such refineries are established in the country the importation of fuel and the fraud associated with it will stop. In the interim, the suggestion by the Independent Petroleum Marketers Association of Nigeria (IPMAN) to import refined fuel into Nigeria (without the payment of fuel subsidy) should be considered by the FG. As a matter of urgency the monopoly in the importation and sale of diesel should be stopped. There is no basis for the monopolistic control of goods and services under a free market economy.

Bailout for States

The bailout granted to state governments by the federal government to pay the arrears of salaries owed workers has been criticised by some members of the ruling class. In the first place, the $2.1 billion shared by the federal, states and local governments was paid to the Federation Account by the NLNG while the CBN was directed to make available a loan of N300 billion to the indebted states. With regard to the number of workers involved in about 20 states, the bailout is a tip of the iceberg compared to the over N7 trillion provided for the members of the comprador bourgeoisie since 2008. Not less than N2.1 trillion was committed by the CBN in collaboration with the federal government into key economic schemes for economic development. In defending the release of the fund, the CBN claimed that “The Federal Government and CBN instituted the intervention programmes to enable key players in the economy have access to finance adding that access to credit remains important to agricultural value-chain”. (Mrs Sarah Alade, CBN Acting Governor, MSME News March 3, 2014).

With regard to the number of workers involved in about 20 states, the bailout is a tip of the iceberg compared to the over N7 trillion provided for the members of the comprador bourgeoisie since 2008. Not less than N2.1 trillion was committed by the CBN in collaboration with the federal government into key economic schemes for economic development.

The benefitting schemes include the Agricultural Credit Guarantee Scheme (NGN69b); Commercial Agricultural Credit Guarantee Scheme (NGN200b); the Nigerian Incentive-Based Risk Sharing System for Agricultural Lending (NGN200b); Small and Medium Enterprises Credit Guarantee Scheme (NGN200b); the SMEs Restructuring and Refinancing Scheme (NGN200b) Energy sector intervention Fund (N213b), Airlines Intervention Fund (NGN300b); Textile Industry Fund (N100b); Bank of Industry loans (N780b) etc. It is on record that majority of the privileged beneficiaries of the aforementioned loans and other huge loans procured from the commercial banks were unable to liquidate them. To prevent a total collapse of the banking sector, the CBN had to bail out the banks with a loan of $7 billion (N1.6 trillion). As if that was not enough, the Assets Management Corporation of Nigeria (AMCON) was quickly established to take over the toxic debts of the rich worth N5.6 trillion.

Conclusion

Since what is good for the goose is good for the gander, the CBN which generously provided bailout for a few rich people and corporate bodies cannot be seriously challenged for the meagre bailout made available to the states. However, to prevent the states from running to Abuja for bailout in the near future, the CBN should assist the non-oil producing states to develop solid minerals and agriculture. Instead of further impoverishing the Nigerian people, the Buhari Administration should pluck up the courage to stop leakages in the system, end capital flight and the illegal diversion of public funds by public officers. The EFCC should leave no stone unturned in the recovery of the nation’s looted wealth. Henceforth, state governments should cooperate with the EFCC in the investigation and prosecution of those who have diverted public funds.

Femi Falana, a Senior Advocate of Nigeria, writes from Lagos.

This was the Keynote Address at the 7th Annual Distinguished Lecture of the Nigerian Institute of Quantity Surveyors (Lagos State Chapter) held in Lagos on Tuesday, July 21, 2015.

 

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