Have
things remained how they were when President Muhammadu Buhari took over
about a year ago? Certainly not! Here are what has changed, writes
OLUKOREDE YISHAU
Facts and figures
N3tr Between June 2015 and April 2016, the Federal Government TSA collection clocked N3trillion.
40 The number of accounts closed in NNPC to give room for accountability
60% Port Harcourt and Warri refineries are back in operation with 60 per cent capacity and producing 7 million litres of PMS daily. The Kaduna refinery also resumed production at the end of the April, 2016.
N689.5 The amount President Buhari directed the CBN to disburse as bailout to 27 states to pay salaries.
34,000 The number of ghost workers draining the nation’s resources now expunged from the Federal Civil Service.
N2.29b The amount the government saves monthly for expunging 34,000 ghost workers from payroll.
$1m The amount saved as a result of President Buhari’s directive stopping the appointment of a government delegation for pilgrimage to Saudi Arabia
25 On assumption of office, the President cut down the number of ministries from 42 to 25 to reduce the cost of governance.
$321m The amount Switzerland will repatriate to Nigeria from the illicitly acquired wealth of the Gen. Sani Abacha family.
N7b The amount recovered as at March by the Presidential Committee set up to probe contracts awarded by the Office of the National Security Adviser (ONSA) from 2011 to 2015.
11,595 The total number of persons rescued by the Nigerian troops during the ongoing operations in the Northaast as at February
$21m The amount Nigeria has provided to the Task Force since June 2015.
$5m The support announced in June last year by the U.S. for the fight against the terrorists in the sub-region.
$40m The amount announced in April 2016 by the U.S. for humanitarian assistance in the sub-region
$1b The amount being saved annually by the elimination of the Offshore Processing Agreement (OPA) through the introduction of the Direct Sales and Direct Purchase (DSDP) scheme with reputable off-shore refineries
7m The amount of litres of PMS produced daily by the Port Harcourt, Warri and Kaduna Refineries
The report was not just damning. It exposed the country’s nakedness. Titled: “Inside NNPC Oil Sales: A Case for Reform in Nigeria”, it detailed an opaque oil-for-fuel swap agreements, the withholding of an estimated $12.3 billion from the treasury by the Nigerian National Petroleum Corporation (NNPC) and many more.
Issued by the Natural Resource Governance Institute (NRGI), the report also showed that in 2013, the treasury got only 58 per cent of the $16.8 billion worth of oil the NNPC voted for its underperforming refineries.
According to Aaron Sayne, who co-authored the report with Alexandra Gillies and Christina Katsouris, there was too much impunity in the oil sector.
Sayne said: “Oil sales are Nigeria’s biggest revenue stream, but management has worsened in recent years. By our estimate, just three of the problematic provisions in a single swap contract may have cost the government $381 million, or $16.09 per barrel of oil, in a single year.”
Gillies added: “The combination of a new government and the current budgetary shortfalls offers Nigeria its best chance in years for overhauling NNPC’s oil sales. The status quo is unaffordable. Everyone from trading companies to Nigerian citizens is waiting to see how the new government will approach these transactions, including the allocation of new export or swap contracts. Our research maps the current state of play, and we suggest what issues reformers in Nigeria ought to urgently address.”
A more transparent NNPC
The report, which was issued before Muhamamdu Buhari came on board as President, was no hold barred. It urged the President to reverse the trend. So, what has Buhari done in the last one year to redirect the oil sector?
One of the first steps the administration took was to reconstruct the opaque accounting structure of the NNPC to be more transparent. This led to the closure of more than 40 accounts. Now, NNPC publishes its monthly financial reports. Operational deficits have been reduced by not less than 50 per cent. NNPC outstanding Annual Audits from 2011 to 2014 has been conducted.
The agency is also undergoing other forms of restructuring that will make it an effective entity. This restructuring, said analysts, leaves room for competition, predictable revenue generation and compliance with global best practices.
Buhari has also resolved the shadowy oil swap deals that had cost the country billions of dollars and left it at the mercy of a few rich Nigerians. The government has also introduced third party financing to eliminate direct funding of cash calls. The administration has also renegotiated existing service contracts under Joint Venture and Production sharing contracts (PSC) Operations by about 30 per cent leading to operational efficiency improvements and cost reductions.
The administration has also eliminated the Offshore Processing Agreement (OPA) through the introduction of the Direct Sales and Direct Purchase (DSDP) scheme with reputable off-shore refineries. This has yielded annual savings of $1 billion.
State of the refineries
Before the inauguration of the current administration, the Port Harcourt and Warri refineries were dormant. Now, they are back in operation with 60 per cent capacity and producing 7 million litres of PMS daily. The Kaduna refinery also resumed production at the end of the April, 2016.
Minister of State for Petroleum Dr Ibe Kachiwku said the government was looking at privatising the refineries within 12 months. He said oil giants Agip and Chevron have indicated interest in purchasing two of the refineries.
“We have gotten commitments from some of the majors. Agip has indicated interest to work with us on Port Harcourt, Chevron on Warri. We are talking to Total on Kaduna,” Kachikwu told Reuters.
He explained that the government had been able to recover the two critical crude supply pipelines; which were Escravos/Warri and Bonny/Port Harcourt crude supply pipelines.
Kachikwu said the pipelines were down for six to seven years but had been repaired and were working and supplying crude to the refineries.
“For the first time, the refineries will get their crude, pay for it; they will sell their products and they will earn the income from that product. And then, they can develop and continue to maintain the refineries even after this intervention is over.
“Port Harcourt is back in production, Warri is back in production… It is something of joy,” he said.
Also, Kachikwu said about 25 licences that were given to private operators between 2002 and 2014 to build refinery complexes in Nigeria would be reviewed and inactive ones would be revoked.
He said: “The next stage of this is that we are going to look at all the licences that have been given out; some of them were given a window within which to build their refineries and we are going to revoke the ones that were not used.
“The reason they did not use the licences is that unless the price is right on the outer point, your economics cannot balance. So, no refinery investment in the world comes to a country where there is no liberalisation and it is not just Nigeria because if you don’t liberalise, nobody is going to invest in your refineries.
“So, that is why they did not, a lot of them thought it was nice to have licences but as soon as you move into the capital market and you do your analysis, you realise this.”
Bailout for states
At the time Buhari took over, many states were struggling with arrears of salaries. To alleviate the suffering of Nigerians, the President last September directed the Central Bank of Nigeria (CBN) to disburse N689.5 billion as bailout to 27 states to pay salaries.
And last month, as a way of stimulating the economy and reduce poverty, Buhari approved deferment in the payment of the bailout because states were under the burden of the fall in commodity prices.
Killing the ghosts in civil service
Every month, the government was losing N2.29b to the payment of more than 34,000 ghost workers. An audit carried out by the Buhari administration revealed this drain and it has since been blocked.
Finance Minister Mrs Kemi Adeosun said the deploying the Bank Verification Number (BVN) revealed the ghost workers. Initially, 23,000 ghost workers were discovered and less than three weeks later, another 11,000 ghost workers were also discovered on government’s payroll.
TSA and cutting of wastages
The implementation of the Treasury Single Account (TSA) has provided greater visibility of government revenues and cash flows. Between June 2015 and April 2016, the Federal Government TSA collection stood at N3trillion. This was made possible by Buhari’s directive to Ministries, Departments and Agencies of government to close multiple accounts, thereby plugging loopholes for leakages.
To save funds, Buhari cancelled government sponsorship of delegation for pilgrimage to Saudi Arabia. Through this, the government says it has saved about $1m and N30m on local expenses.
To reduce the cost of governance, the President cut down the number of ministries from 42 to 25. Also, the President directed that all top government officials must prioritise foreign travels and use only business class tickets, instead of first class tickets as was previously obtainable.
A war on high pedestal
The anti-corruption war of the current administration is one thing that is clear to all as one of the things that have changed in the last 12 months. Right from the moment he won the presidential election, Buhari’s no-nonsense and incorruptible mien sent a signal to looters of public funds, with many of them returning funds stolen under the Goodluck Jonathan administration.
As a way of creating a frame work for prosecuting the war against corruption, Buhari set up an Advisory Committee on War Against Corruption headed by Prof Itse Sagay. The anti-corruption battle has seen several high profile cases going on in the courts. Such cases include the ones against former Peoples Democratic Party (PDP) spokesman Olisa Metuh, Daar Communications Chairman Dr Raymond Dokpesi and former Chief of Defence Staff Alex Badeh.
In March, the Presidential Committee set up to probe contracts awarded by the Office of the National Security Adviser (ONSA) from 2011 to 2015 announced the recovery of over N7 billion from indicted companies and individuals.
No longer a pariah state
Unlike in the past, the international community has warmed up to the Buhari administration in the last twelve months. And Buhari has enlisted the support of multilateral institutions, such as the World Bank and IMF, security agencies, Western countries and other friendly nations to source, locate and repatriate stolen assets.
At one of his international engagements, specifically the London summit on anti-corruption, Buhari announced that Nigeria would begin the full implementation of the principles of the OPEN contracting data standards. This was in furtherance of his trips to the Middle East, where he had gone to sensitise the governments on the need to repatriate stolen assets and hand over the looters for trial in Nigeria. In January, Nigeria and UAE signed Judicial Agreements on Extradition, Transfer of Sentenced Persons, Mutual Legal Assistance on Criminal Matters.
The Federal Government and the Swiss Government in March signed a Letter of Intent on the Restitution of Illegally-Acquired Assets forfeited in Switzerland. Under the agreement, Switzerland will repatriate $321 million illicitly acquired by the Gen. Sani Abacha family.
Boko Haram: No longer the Lord of Sambisa
The president was aware of the magnitude of the Boko Haram challenge. No wonder one of the first things he changed was the military structure, which led to the relocation of the Nigerian Military Command Centre to Maiduguri in May last year. This has contributed to the success in the fight against insurgency in the Northeast.
The results are glaring: Over 11,595 persons have been rescued by the troops, including one of the Chibok schoolgirls- Amina Ali; since last December, all Nigerian territories previously under Boko Haram control have been regained; Nigeria has provided $21million to the Task Force since June 2015 and is committed to an additional $79m, bringing the total of Nigeria’s commitment to the Task Force to $100 million; and in June 2015, the United States announced a $5-million support for the fight against the terrorists in the sub-region.
The seriousness with which the administration has pursued the anti-terror war has also led to the U.S government further announcing an additional $40 million for humanitarian assistance in the sub-region
In May, the country hosted a Regional Security Summit to boost military operations against Boko Haram and forge a global support for the rehabilitation of the IDPs and rebuilding of the North East.
The government has ensured a cohesive international support in the fight against terrorism and assistance to victims and communities affected by terrorism.
The president also did these
In April, Buhari ordered the release of 10,000 tons of grains from the National Strategic Grains Reserve to cushion the effect of rising food prices. He also directed the Ministry of Agriculture to provide assistance to able-bodied men and women in IDP camps return to farming.
The President directed the CBN to clear all the outstanding allowances of former militants studying in various institutions across the world. He salvaged the Amnesty Programme by giving it a new vision of catering for the weak, the poor and the vulnerable, instead of enriching a few.
Buhari also ordered a fast-track of Ogoni clean-up, acting on a United Nations Environmental Project Report abandoned by the previous administration.
Special Adviser to the President on Media Femi Adesina said the next one year would bring better goodies for Nigerians. Adesina said the government has laid a proper foundation capable of putting the country on the right footing.
Facts and figures
N3tr Between June 2015 and April 2016, the Federal Government TSA collection clocked N3trillion.
40 The number of accounts closed in NNPC to give room for accountability
60% Port Harcourt and Warri refineries are back in operation with 60 per cent capacity and producing 7 million litres of PMS daily. The Kaduna refinery also resumed production at the end of the April, 2016.
N689.5 The amount President Buhari directed the CBN to disburse as bailout to 27 states to pay salaries.
34,000 The number of ghost workers draining the nation’s resources now expunged from the Federal Civil Service.
N2.29b The amount the government saves monthly for expunging 34,000 ghost workers from payroll.
$1m The amount saved as a result of President Buhari’s directive stopping the appointment of a government delegation for pilgrimage to Saudi Arabia
25 On assumption of office, the President cut down the number of ministries from 42 to 25 to reduce the cost of governance.
$321m The amount Switzerland will repatriate to Nigeria from the illicitly acquired wealth of the Gen. Sani Abacha family.
N7b The amount recovered as at March by the Presidential Committee set up to probe contracts awarded by the Office of the National Security Adviser (ONSA) from 2011 to 2015.
11,595 The total number of persons rescued by the Nigerian troops during the ongoing operations in the Northaast as at February
$21m The amount Nigeria has provided to the Task Force since June 2015.
$5m The support announced in June last year by the U.S. for the fight against the terrorists in the sub-region.
$40m The amount announced in April 2016 by the U.S. for humanitarian assistance in the sub-region
$1b The amount being saved annually by the elimination of the Offshore Processing Agreement (OPA) through the introduction of the Direct Sales and Direct Purchase (DSDP) scheme with reputable off-shore refineries
7m The amount of litres of PMS produced daily by the Port Harcourt, Warri and Kaduna Refineries
The report was not just damning. It exposed the country’s nakedness. Titled: “Inside NNPC Oil Sales: A Case for Reform in Nigeria”, it detailed an opaque oil-for-fuel swap agreements, the withholding of an estimated $12.3 billion from the treasury by the Nigerian National Petroleum Corporation (NNPC) and many more.
Issued by the Natural Resource Governance Institute (NRGI), the report also showed that in 2013, the treasury got only 58 per cent of the $16.8 billion worth of oil the NNPC voted for its underperforming refineries.
According to Aaron Sayne, who co-authored the report with Alexandra Gillies and Christina Katsouris, there was too much impunity in the oil sector.
Sayne said: “Oil sales are Nigeria’s biggest revenue stream, but management has worsened in recent years. By our estimate, just three of the problematic provisions in a single swap contract may have cost the government $381 million, or $16.09 per barrel of oil, in a single year.”
Gillies added: “The combination of a new government and the current budgetary shortfalls offers Nigeria its best chance in years for overhauling NNPC’s oil sales. The status quo is unaffordable. Everyone from trading companies to Nigerian citizens is waiting to see how the new government will approach these transactions, including the allocation of new export or swap contracts. Our research maps the current state of play, and we suggest what issues reformers in Nigeria ought to urgently address.”
A more transparent NNPC
The report, which was issued before Muhamamdu Buhari came on board as President, was no hold barred. It urged the President to reverse the trend. So, what has Buhari done in the last one year to redirect the oil sector?
One of the first steps the administration took was to reconstruct the opaque accounting structure of the NNPC to be more transparent. This led to the closure of more than 40 accounts. Now, NNPC publishes its monthly financial reports. Operational deficits have been reduced by not less than 50 per cent. NNPC outstanding Annual Audits from 2011 to 2014 has been conducted.
The agency is also undergoing other forms of restructuring that will make it an effective entity. This restructuring, said analysts, leaves room for competition, predictable revenue generation and compliance with global best practices.
Buhari has also resolved the shadowy oil swap deals that had cost the country billions of dollars and left it at the mercy of a few rich Nigerians. The government has also introduced third party financing to eliminate direct funding of cash calls. The administration has also renegotiated existing service contracts under Joint Venture and Production sharing contracts (PSC) Operations by about 30 per cent leading to operational efficiency improvements and cost reductions.
The administration has also eliminated the Offshore Processing Agreement (OPA) through the introduction of the Direct Sales and Direct Purchase (DSDP) scheme with reputable off-shore refineries. This has yielded annual savings of $1 billion.
State of the refineries
Before the inauguration of the current administration, the Port Harcourt and Warri refineries were dormant. Now, they are back in operation with 60 per cent capacity and producing 7 million litres of PMS daily. The Kaduna refinery also resumed production at the end of the April, 2016.
Minister of State for Petroleum Dr Ibe Kachiwku said the government was looking at privatising the refineries within 12 months. He said oil giants Agip and Chevron have indicated interest in purchasing two of the refineries.
“We have gotten commitments from some of the majors. Agip has indicated interest to work with us on Port Harcourt, Chevron on Warri. We are talking to Total on Kaduna,” Kachikwu told Reuters.
He explained that the government had been able to recover the two critical crude supply pipelines; which were Escravos/Warri and Bonny/Port Harcourt crude supply pipelines.
Kachikwu said the pipelines were down for six to seven years but had been repaired and were working and supplying crude to the refineries.
“For the first time, the refineries will get their crude, pay for it; they will sell their products and they will earn the income from that product. And then, they can develop and continue to maintain the refineries even after this intervention is over.
“Port Harcourt is back in production, Warri is back in production… It is something of joy,” he said.
Also, Kachikwu said about 25 licences that were given to private operators between 2002 and 2014 to build refinery complexes in Nigeria would be reviewed and inactive ones would be revoked.
He said: “The next stage of this is that we are going to look at all the licences that have been given out; some of them were given a window within which to build their refineries and we are going to revoke the ones that were not used.
“The reason they did not use the licences is that unless the price is right on the outer point, your economics cannot balance. So, no refinery investment in the world comes to a country where there is no liberalisation and it is not just Nigeria because if you don’t liberalise, nobody is going to invest in your refineries.
“So, that is why they did not, a lot of them thought it was nice to have licences but as soon as you move into the capital market and you do your analysis, you realise this.”
Bailout for states
At the time Buhari took over, many states were struggling with arrears of salaries. To alleviate the suffering of Nigerians, the President last September directed the Central Bank of Nigeria (CBN) to disburse N689.5 billion as bailout to 27 states to pay salaries.
And last month, as a way of stimulating the economy and reduce poverty, Buhari approved deferment in the payment of the bailout because states were under the burden of the fall in commodity prices.
Killing the ghosts in civil service
Every month, the government was losing N2.29b to the payment of more than 34,000 ghost workers. An audit carried out by the Buhari administration revealed this drain and it has since been blocked.
Finance Minister Mrs Kemi Adeosun said the deploying the Bank Verification Number (BVN) revealed the ghost workers. Initially, 23,000 ghost workers were discovered and less than three weeks later, another 11,000 ghost workers were also discovered on government’s payroll.
TSA and cutting of wastages
The implementation of the Treasury Single Account (TSA) has provided greater visibility of government revenues and cash flows. Between June 2015 and April 2016, the Federal Government TSA collection stood at N3trillion. This was made possible by Buhari’s directive to Ministries, Departments and Agencies of government to close multiple accounts, thereby plugging loopholes for leakages.
To save funds, Buhari cancelled government sponsorship of delegation for pilgrimage to Saudi Arabia. Through this, the government says it has saved about $1m and N30m on local expenses.
To reduce the cost of governance, the President cut down the number of ministries from 42 to 25. Also, the President directed that all top government officials must prioritise foreign travels and use only business class tickets, instead of first class tickets as was previously obtainable.
A war on high pedestal
The anti-corruption war of the current administration is one thing that is clear to all as one of the things that have changed in the last 12 months. Right from the moment he won the presidential election, Buhari’s no-nonsense and incorruptible mien sent a signal to looters of public funds, with many of them returning funds stolen under the Goodluck Jonathan administration.
As a way of creating a frame work for prosecuting the war against corruption, Buhari set up an Advisory Committee on War Against Corruption headed by Prof Itse Sagay. The anti-corruption battle has seen several high profile cases going on in the courts. Such cases include the ones against former Peoples Democratic Party (PDP) spokesman Olisa Metuh, Daar Communications Chairman Dr Raymond Dokpesi and former Chief of Defence Staff Alex Badeh.
In March, the Presidential Committee set up to probe contracts awarded by the Office of the National Security Adviser (ONSA) from 2011 to 2015 announced the recovery of over N7 billion from indicted companies and individuals.
No longer a pariah state
Unlike in the past, the international community has warmed up to the Buhari administration in the last twelve months. And Buhari has enlisted the support of multilateral institutions, such as the World Bank and IMF, security agencies, Western countries and other friendly nations to source, locate and repatriate stolen assets.
At one of his international engagements, specifically the London summit on anti-corruption, Buhari announced that Nigeria would begin the full implementation of the principles of the OPEN contracting data standards. This was in furtherance of his trips to the Middle East, where he had gone to sensitise the governments on the need to repatriate stolen assets and hand over the looters for trial in Nigeria. In January, Nigeria and UAE signed Judicial Agreements on Extradition, Transfer of Sentenced Persons, Mutual Legal Assistance on Criminal Matters.
The Federal Government and the Swiss Government in March signed a Letter of Intent on the Restitution of Illegally-Acquired Assets forfeited in Switzerland. Under the agreement, Switzerland will repatriate $321 million illicitly acquired by the Gen. Sani Abacha family.
Boko Haram: No longer the Lord of Sambisa
The president was aware of the magnitude of the Boko Haram challenge. No wonder one of the first things he changed was the military structure, which led to the relocation of the Nigerian Military Command Centre to Maiduguri in May last year. This has contributed to the success in the fight against insurgency in the Northeast.
The results are glaring: Over 11,595 persons have been rescued by the troops, including one of the Chibok schoolgirls- Amina Ali; since last December, all Nigerian territories previously under Boko Haram control have been regained; Nigeria has provided $21million to the Task Force since June 2015 and is committed to an additional $79m, bringing the total of Nigeria’s commitment to the Task Force to $100 million; and in June 2015, the United States announced a $5-million support for the fight against the terrorists in the sub-region.
The seriousness with which the administration has pursued the anti-terror war has also led to the U.S government further announcing an additional $40 million for humanitarian assistance in the sub-region
In May, the country hosted a Regional Security Summit to boost military operations against Boko Haram and forge a global support for the rehabilitation of the IDPs and rebuilding of the North East.
The government has ensured a cohesive international support in the fight against terrorism and assistance to victims and communities affected by terrorism.
The president also did these
In April, Buhari ordered the release of 10,000 tons of grains from the National Strategic Grains Reserve to cushion the effect of rising food prices. He also directed the Ministry of Agriculture to provide assistance to able-bodied men and women in IDP camps return to farming.
The President directed the CBN to clear all the outstanding allowances of former militants studying in various institutions across the world. He salvaged the Amnesty Programme by giving it a new vision of catering for the weak, the poor and the vulnerable, instead of enriching a few.
Buhari also ordered a fast-track of Ogoni clean-up, acting on a United Nations Environmental Project Report abandoned by the previous administration.
Special Adviser to the President on Media Femi Adesina said the next one year would bring better goodies for Nigerians. Adesina said the government has laid a proper foundation capable of putting the country on the right footing.
