The public outcry over the unilateral move by the Nigerian National Petroleum Corporation (NNPC) to borrow a whopping $1.5 billion ostensibly to pay off some of its accumulated debts owed local and international creditors bears close examination. The NNPC’s bizarre justification for the hefty syndicated loan, which it implausibly claims will “salvage Nigeria’s credit rating”, is incomprehensible. It is, in the prevailing circumstances, outrageous and scandalous and should be shelved.
The proposal is equally unacceptable for its failure to secure the approval of the National Assembly in flagrant violation of Section 44 (2)a of the Fiscal Responsibility Act which prescribes as a mandatory condition that “government in the federation and it’s agencies and corporations desirous of borrowing shall show the existence of prior authorization in the appropriation or other Law for purpose for which the borrowing is to be utilized.”
Quite predictably, the House of Representatives mandated it’s Joint Committee on Loans and Debts, Justice, Petroleum Downstream and Upstream to investigate the loan which was neither captured in the 2013 appropriation bill nor was it reflected in the 2013-2015 Medium Term Expenditure Frame work as passed by the National Assembly
The loan, according to Reuters which broke the story, was provided by many Nigerian and international banks and brokered by Standard Chartered Bank. The debt, it was gathered, will be paid back over five and half years. The NNPC is believed to have put up 15,000 barrels per day of its crude oil production as collateral and President Goodluck Jonathan is said to have okayed the transaction.
It is hard to understand what could have informed the NNPC decision despite the huge earnings from oil and gas. In fact, there is no reason for the NNPC to go cap in hand to foreign lenders, requesting loans to meet its debt obligations, especially as oil prices are currently high enough for oil producing countries like Nigeria to rake in huge revenues from oil sales to meet any incurred expenditure. It therefore stands to reason that whatever justifications the NNPC advances for the loan is absolutely untenable.
In its initial explanation, the corporation said it would use the money to offset some foreign debts accumulated on imported refined petroleum products. Then the story changed. Andrew Yakubu, NNPC Group Managing Director, told reporters in Lagos that “NNPC is not borrowing; we are only using our resources to offset long-standing debts.” Yakubu claimed the deal was a “purely commercial decision” for which the NNPC did not require parliamentary approval.
As an idea, the NNPC planned loan of a phantom $1.5 billion fails any test of reason or wisdom. The motive is suspect especially as the exact motive for the loan keeps changing depending on which official is speaking. The NPC should spare the nation another drain-pipe. It should find a more cost-effective way of conducting its business without resort to underhand methods and sharp practices that only open new avenues for rent-seeking and corruption.
Besides, there are enough activities arising from the Joint Ventures (JVs) and Production Sharing Contracts (PSCs) operations to make the NNPC buoyant to meet any of its financial obligations while at the same time perform its statutory responsibilities as a national oil company. Revelations of spurious financial dealings and sharp practices on the much-talked about fuel subsidy confirmed the worst fears of Nigerians that the huge amount the Federal Government claims it expended on fuel subsidy, was bogus and actually not paid for fuel consumed by Nigerians. It would appear that a large chunk of the huge amount was simply stolen by unscrupulous individuals through dubious deals like the said loan.
NNPC officials have deliberately exploited the loopholes in the country’s corrupt system to rip off the nation through over-invoicing, excess importation, smuggling, round tripping, payment for fuel not supplied, etc. In effect, government has been subsidizing corruption, and not Nigerians.
The circumstances surrounding the said $1.5 billion NNPC loan may not exactly fit into illegality; it nevertheless leaves much to be desired in terms of public morality, accountability and transparency. More than that, it typifies a classical official endorsement of public officers’ abuse of their offices and the trust reposed on them by ordinary citizens.
Everything about this dubious loan stinks. The NNPC is all about corruption; it gets away with its lawlessness aided by Presidential connivance and parliamentary timidity. For God and country, House members must use all constitutional means, including the courts, should be explored to oblige the government to suspend the loan and resolve, once and for all, the issue of oversight of the corruption-riddled NNPC.
Fighting corruption in Nigeria has become the saddest cliché of all. It is a collusion and cover-up that is bigger than the original crime. Notwithstanding his empty platitudes about his transformation agenda, Jonathan is not advancing the cause of Nigerian democracy; he is perfecting a lootocracy. In Nigeria, anyone who does not wage a frontal war against corruption is consolidating the lootocracy. Surely, even Jonathan cannot transform that.
Huhuonline.com Editorial
