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Obasanjo’s Oil Windfall Scandal: Will There Be Another Missing Okigbo Panel Report? BySenior Fyneface
Each time Nigeria benefits from unexpected revenue windfall from oil and gas sales, the next thing that follows is scandal, which usually concerns the spending of such windfall earnings. First it was former military president, Gen Ibrahim Babangida, now we have the current case of civilian president, Gen Olusegun Obasanjo.
If Dr Pius Okigbo (of blessed memory) lamented for the entire nation on the reckless manner the Babangida administration blew over $12.4 billion receipts in the special escrow accounts, the world-renowned economist must be crying to the almighty God concerning the country following the disclosure by the authorities of the Revenue Mobilization and Fiscal Commission (RMAFC) that President Obasanjo has already blown over $13.2 of the latest oil windfall.
The first oil windfall was as a result of a surge in the prices of crude oil (an average of $28 per barrel during the Gulf crisis) following the scarcity of supplies in international market orchestrated by a shortfall of five million barrels per day from the Gulf of Suez. This was Babangida’s windfall.
The second, Obasanjo’s windfall, (which is still on) came as oil prices surged above $70 per barrel also orchestrated by short falls in supply to the market as a result of the crisis in Iraq, Iran and Nigeria’s Niger Delta.
The two oil windfalls episodes share several things in common particularly in the manner, which the monies earned, were spent. This is in addition to the two players being former military rulers though President Obasanjo under the current dispensation, was supposed to have been democratically elected by the Nigerian voters.
The Pius Okigbo-headed Panel that investigated the spending of the Babangida oil windfall earnings revealed that $12.2 billion of the $12.4 billion was “spent on what could neither be adjudged genuine high priority projects or truly regenerative investment”. In common-man language, the money was squandered.
The Joint Senate Committee on Finance, Appropriation and National Planning, investigating the illegal spending of the Obasanjo’s windfall was told on Thursday June 15, 2006, that so far, the Presidency have spent over $13.2 billion of the monies in manners that could best be described as blurred. Also in common-man language, the money was squandered.
President Babangida, who allocated 200,000 barrels of crude oil per day to fund the LNG Project, initiated the concept of escrow and special accounts in 1986. In 1988 other special escrow accounts were created to fund specific development projects majority of which had remained in the drawing board till today.
It took The Revenue Mobilization Allocation and Fiscal Commission (RMAFC) Chairman Hamman Tukur, when he addressed, the Joint Senate Committee on Finance, Appropriation and National Planning investigating illegal withdrawals from the Federation Account on Thursday June 15, 2006 to disclosed that the President Olusegun Obasanjo since 2003 created and has been operating three special escrow accounts namely, “export crude oil, excess Petroleum Profit Tax (PPT) and excess Royalty Accounts illegally maintained exclusively by the Presidency, out of which $13.2 billion has so far been withdrawn”.
The Babangida administration, as the Okigbo Panel disclosed, lodged all the windfall money- $12.4 billion in dedication, stabilization and other special escrow accounts, which were hardly applied for the purpose for which they were originally intended.
The Late Dr Okigbo while presenting the report of his panel to the then Head of State, late General Sani Abacha, in 1994, was quoted as having said, “these disbursements were clandestinely undertaken while the country was openly reeling with crushing effects of the structural adjustment programme of the Babangida administration and external debt burden. This represented, no matter the initial justification for creating the accounts, a gross abuse of public trust.
“Had these resources of $12.4 billion, or even a significant portion been paid into the external reserves, the impact on the Naira/Dollar exchange rate today; on the attitude of our external creditors; on the credibility of Nigeria and on the environment for foreign investment, etc. would have been incalculable”.
The panel inaugurated in 1994, revealed how Babangida, in connivance with the top officials of Central Bank of Nigeria (CBN) and some NNPC executives squandered the Gulf war crude oil sales windfall. It was discovered that the money was blown on questionable and often unexplained expenses by the administration.
“How the money was used by the different government agencies that benefited was at best not specific and at worst obscured”.
A new dimension added by President Obasanjo to the Babangida escrow accounting style was also made public by the RMAFC which alleged that Obasanjo “since 2003 has operated a revenue formula unknown to the constitution”.
The shocking revelation from the RMAFC was that “Obasanjo, in disregard of section 162 of the constitution, adjusted the revenue formula vide letter No. AGF/TRY/796/VOLIV/41 of January 15, 2004, addressed to the Commission by the Minister of Finance.
"In that letter, the following is the current formula: One column shows the executive order while the second column shows the adjusted formula which has no basis in law since it has not come to the National Assembly as amendments to the Modification Order."
According to RMAFC boss, the three accounts are not only illegal; they have no status in law and contravened section 162(3) of the constitution which provides that... “The Federation Account into shall be paid all revenues collected by the Government on formula approved by the National Assembly”.
The RMAFC boss said, "The Excess Revenue Account, from which all the withdrawals were effected is made up of: Federation Export Crude Oil, Excess PPT and Excess Royalty. Documents available to the Commission from the FAAC records show that the Paris Club debt repayments were effected in three trances, including one per cent commission directly from the Excess Crude Oil Account which forms part of the Federation Account".
Tukur told the Senate Committee that the payment of the Paris Club debts was made directly from the Excess Crude Oil Account as against a Supreme Court judgment of April 5, 2002, which ruled that each debtor state should pay its own debt.
The big questions lie in "The arbitrary manner in which these debts were paid, where states such as Kaduna, Katsina, Nassarawa that do not owe the Paris Club any debts had their own portions of the Excess Proceeds (Federation Account) not disbursed to them. Similarly, the sum of about $2.4 billion disbursable to the 774 local governments (who do not owe the Paris Club anything) was arbitrarily used to settle debts not owed by the local governments”
"The payment of the Paris Club debts was made directly from the Excess Crude Oil Account as against a Supreme Court judgment of April 5, 2002 which ruled that each debtor state should pay its own debt.
Meanwhile, the Presidency made the illegal withdrawals for blurred purposes while publicly campaigning for transparency and accountability in addition to asking the already battered people of Nigeria to bear with government in the biting effects of its IMF engineered reform programme.
It is difficult to reconcile that while Obasanjo was busy blowing the proceeds of the latest oil windfall on programmes that literally translate to misappropriation and squandering, he sees and portrays as ‘disloyal’ his second in command Atiku Abubakar whose only sin of ‘disloyalty’ was that he appealed to the President to give a human face to the reform programmes so that ordinary Nigerians can wholeheartedly accept the so called reform initiatives as well-intended to improve the welfare of the citizenry.
Back to Gen Babangida and his oil windfall, who in a recent attempt to exonerate himself from what was, in every bit of it, a clear indictment of his administration by President Obasanjo said, “people ought to have done simple calculations to ascertain the correct situation of things then”. President Obasanjo at a recent public function in Abuja said that the much talked about Gulf war windfall of 1990 estimated at about $12.4 billion was squandered by the Babangida-led administration.
The former military president’s argument was clearly set to confuse issues.
Gen Babangida already alleged in a recent press interview that those who have details of the Okigbo Panel Report and know its findings on the Gulf war windfall chose to manipulate the public on the issue. He also may be correct but that has never been the issue.
Remarkably, the current interest in the detailed content and where-about of the report of the Okigbo-led panel of investigation was aroused when the Presidential Adviser on Petroleum and Energy, Dr Edmund Daukoru, now Minister of State for Petroleum, who represented President Obasanjo during the Fourth Nigerian Oil and Gas Conference in Abuja said that, “The Gulf war windfall unfortunately was largely squandered with little to show for it”.
As good as it sounded then, few months from the indictment of the Babangida-led administration, the Obasanjo and Dakouru led oil proceeds management accounting was exposed by the RMAFC. However in spirit d’ corp., the two generals owe the Nigerian people a detailed explanation of how the monies that could have given Nigerians uninterrupted electric power and water supplies even in the most arid parts of the country were blown.
Let’s I forget, the crux of the matter: as the Nigerian people eagerly suspect that the recent revelations and submission of the RMAFC to the Joint Senate Committee on the squandering of the latest oil windfall may disappear like the Okigbo Panel Report that heavily indicted Babangida concerning the Gulf war oil windfall, the National Assembly should urgently probe all the allegations raised in the RMAFC submission with a view to clearing President Obasanjo of wrong doings.
If this is done and done properly, who knows, the team that stole the original copies of the Pius Okigbo-led Panel Report may have a rethink or rather be compelled to produce them, in the spirit of truth and reconciliation after all that is what this administration has lived to preach.
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