Goodluck Jonathan must publish the full report into lost oil earnings.
Goodluck Jonathan’s presidency in Nigeria has been defined as much by what has gone missing as by what his government has put in place: the schoolgirls abducted by Boko Haram and billions of dollars in oil revenues allegedly unaccounted for. It is curious therefore, at such a politically sensitive time, that he has allowed another dossier to go adrift: the PriceWaterhouseCoopers audit into oil accounts. The longer his government withholds the report, the more suspicious its motives in public eyes.
Granted, the timing is awkward; just two weeks before presidential elections that have polarised a nation beset by violence and reeling from a fall in oil revenues. But the Nigerian public have a right to full disclosure on what has been an ugly stain on the country’s reputation. This is especially so as it touches on the management of Africa’s biggest economy under the incumbent president, who is seeking re-election.
More than a year ago, Lamido Sanusi, the former central bank governor, publicly questioned discrepancies between oil sales and income of more than $1bn per month. Mr Sanusi warned that the alleged shortfalls to the treasury - up to $20bn between January 2012 and July 2013 - meant foreign reserves were under pressure, even though Nigeria should have been benefiting from the soaring price of oil and saving against an eventual fall. These revelations fuelled a public furore, and investor confidence was knocked further when Mr Sanusi, now Emir of Kano, was suspended from his job.
The government’s answer was to commission the forensic audit, originally due out by September. The auditor general finally released last month a page of selected findings from PwC’s inquiry. Top government and state oil company officials duly seized on these to declare the Nigerian National Petroleum Corporation exonerated and the mystery of the “missing billions” resolved. The NNPC owes the treasury $1.49bn, the government claims, a far cry from the $20bn hole that Mr Sanusi pointed to.
Until the full audit is published, however, it is hard to be sure. Even if it is, PwC’s terms of reference did not cover the extent of questions raised by Mr Sanusi, nor do the findings released so far explain the shortfalls in Nigeria’s earnings during the oil boom. Notably absent is any detailed discussion of the value to the state of contentious financing arrangements with private companies, or of opaque crude oil swaps. Industry experts describe the latter, in which billions of dollars in crude exports are exchanged for refined fuel imports without money changing hands, as the real “Bermuda Triangle”.
According to the auditor-general, PwC found that the state oil company had remitted $50.81bn out of a total of $69.34bn in revenues during the period under scrutiny. It spent $5.32bn on petrol subsidies and $3.38bn on kerosene subsidies, with the remaining gap filled by operational and financing costs. The legality of the kerosene subsidy, which was terminated by presidential directive in 2009 and was not budgeted for thereafter, remains at issue.
Mr Sanusi also alleged that the NNPC was importing about twice the amount of petrol that the nation used while supplying only half its fuel, with the rest provided by private marketers. There appears to have been no effort to audit the volumes of fuel imported, only the NNPC paperwork that supported the subsidies on these.
Fundamental changes to the way Nigeria manages its oil are long overdue. Greater transparency would go some way to help. A good place to start would be by publishing the full PwC report. But it would only be the start.
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