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Nigerian Legislators Call for Prosecution in Fuel Subsidy Corruption

A woman walks past cars buying fuel at a gas station in Lagos, Nigeria, April 24, 2012.
A woman walks past cars buying fuel at a gas station in Lagos, Nigeria, April 24, 2012.
Anne Look

Nigeria's House of Representatives says high-level officials should be prosecuted for alleged theft and mismanagement of the state fuel subsidy. The fuel subsidy remains a flashpoint issue in Nigeria after attempts to lift it in January sparked a strike and deadly protests that paralyzed the nation. Nigeria is already bracing for renewed unrest if the government does not act on the parliament's findings.

Nigerian lawmakers say "sleaze" and "incompetence" by high-level officials involved in the fuel subsidy system cost the country $6.8 billion between 2009 and 2011.

The House of Representatives launched the investigation into apparent overspending on the fuel subsidy in January - after attempts to remove the subsidy led to deadly, nationwide unrest.

Chairman of the investigative committee, Faruk Lawal, opened debate on the findings in the House this week.

"You will discover a sector that has remained non-transparent, that has remained opaque and that has not been subjected to public scrutiny for many years. Perhaps, because of that, all manner of things happen," said Lawal.

And, according to the committee, they did.

The report says the government has been paying suppliers for fuel that was either never imported or was sold abroad. Lawmakers said the number of firms licensed by authorities to import fuel exploded from 5 in 2006 to 140 in 2011. Many of those firms, lawmakers say, did even not have the capacity to import fuel.

Many individuals named in the report have already denied involvement in fraud and threatened to sue. The House says it will hear testimony from fuel marketers not questioned for the original report before it votes on the findings.

The House says high-level officials, including the former head of the state petroleum regulating agency, should face prosecution.

However, anti-graft efforts in Nigeria rarely lead to successful prosecutions, particularly against senior officials. Critics say the few cases that are brought tend to fizzle in the courts.

Nigeria is the continent's largest oil producer. But its refineries are in ruins, meaning the nation must import its fuel.

The fuel subsidy has kept gas cheap for consumers, however economists say the subsidy is an unsustainable drain on the nation's mammoth budget. The International Monetary Fund (IMF) has called on African nations, like Nigeria, to remove fuel subsidies that it says do more to promote corruption than help the poor.

However, the government's abrupt lifting of the subsidy in January doubled fuel and transport prices overnight. Unions declared a nationwide strike. Thousands took to the streets nationwide for three days of protests. The government backpedalled and partially reinstated the subsidy.

The damning parliamentary report marks Nigeria's most extensive anti-graft investigation to date. Still, few believe it will lead to meaningful prosecutions.

Head of the civil society Save Nigeria Group, Pastor Tunde Bakare, says the report could prove a key test for President Goodluck Jonathan’s government.

"If the government rises up to the occasion and does what is right and brings those who are guilty to book, then it would have scored a high mark in the reckoning of the citizens," said Bakare.  "Other than that, only God knows where this will end because there is an outrage."

The House is expected to vote on an amended version of the report in coming weeks. The report would then be passed on to the executive branch for implementation.

The finance minister has already fired two auditing firms associated with the fuel subsidy system.

The presidential adviser on National Assembly matters said Wednesday that the presidency was "on the same page" as legislators and "would not spare" anyone indicted of wrongdoing.

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