The Hub

April 4, 2013

Excess crude as excess fraud

Excess crude as excess fraud

File Photo: Crude Oil

By Josef Omorotinmwan 
AMADIN: My brother, you should know by now that I am not easily given to pessimism. But the truth must be told. The way things are going in Nigeria, there is every cause for worry. I know you are equally concerned and that’s why I want to talk to you as often as I can.

Boyo: Quite true. I am worried. Look at the unnecessary battle for the soul of the APC. These people keep shooting themselves on the leg. In their arrogance, they keep misfiring. This time around, they have stepped too far to grab too much and it must boomerang!

Each time there is a hatchet job, they fall back on a particular section of the country. From Arthur Nzeribe’s ABN of the ill-fated ThirdRepublic to all the oddities in-between; from Syracuse Njokwu’s stale fight to keep Jonathan out of the 2015 contest to the sudden outbreak of APCs – Onyinye Ikeagwuonwu and Oliver Ike’s versions; the people are the same and their methods are similar. Haba! Everything is commercial. After all, commerce is the soul of politics. That the people are shortchanged at every bend, including the obvious fact that theirs is the only zone in the country that has only five states, is immaterial. “Ego” is the name of the game.

Amadin: The way I see it, having attracted enough sympathy to themselves, the authentic owners of the APC should now quickly beat a retreat from that endangered sector. Then let the INEC register the APC for the bullies, thus creating a big problem for them. Having midwifed the APC, they will now be faced with the bigger problem of nurturing it. They must feed the baby or it will die. This is an easy way of allowing the bullies to drive a knife across their throat by irretrievably breaking their own ranks.

Boyo: Bravo! I wasn’t even seeing it that way. These people keep doing the same thing, the same old way and they expect different results, eh? Look at this OtuokeCMSChurch that almost pulled the President down a few months ago. He is at it again. This time, he has come with a big bang. See how he collected all the men of means in Lagos the penultimate week to squeeze money out of them.

Amadin: We are to blame. Our tax collection machinery is utterly defective. If in a single outing, a single man doles out N2 billion in donation and in the cause of a single year, this single man donates immeasurable billions; in the US, Uncle Sam would, through the IRS, pursue this man to the hole and check him thoroughly out on the amount of tax he paid during the year. If there is no true correlation between the donations and his tax payment, a case of tax evasion is established and the only way for the man is the prison.

But in Nigeria what do we find? The liberal donor gets the Greatest Grand Commander of the Federal Republic, GGCFR.

Boyo: This benchmark of a thing is evil and certainly a height of criminality. This is perhaps the only country worldwide where the budget is not built on the amount available. Rather, our oil, which has become the mainstay, would sell for $160 per barrel. Our budget would be based on $80 per barrel. The extra $80 would be kept in one crude account called Excess Crude Account. The amount in this account is extra-budgetary. For the Federal Government, it provides a slush fund for all sorts of unofficial transactions. Once in a while, the Federal Government would invite the states and localities to come and partake in the chop-chop. The Federal Government has just pulled out $2 billion from the fund for sharing among the tiers of government.

Amadin: Do you know that there is a subsisting court ruling declaring the Excess Crude Account illegal and asking that the account should be collapsed into a single Federation Account? The Federal Government has developed such thick skin that it now obeys the laws it wants to obey. Others, like the 2013 Appropriation Act, are discarded with impunity!

Boyo: I do not see why governments should keep sharing the proceeds from the excess crude account. Such proceeds should be invested in the building of refineries in which the various tiers of government would be shareholders. Apart from helping to alleviate the pains from subsidy removal, it would also be a good legacy to leave for the future.

Amadin: I agree with you. Do you know that the whole noise of fuel subsidy is a farce? If anything, we are only subsidizing a few people’s propensity for fraud. As soon as the oil comes out of the ground, we sell 90 percent of the crude in hard currency, leaving the balance 10 percent to be refined for local consumption.

In some oil-producing countries, after making their money from the initial 90 percent crude, they are able to refine the 10 percent and issue same, free of charge, to their citizens. But in Nigeria, the reverse is the case. Because of the lack of functional refineries, the crude must be shipped abroad for refining and by the time it is reshipped to us, the price of the refined product has hit the ceiling and unaffordable to individual Nigerians. If the excess crude account must exist at all, let’s put its proceeds to legitimate use – the building of refineries here.

Boyo: Just imagine the lousy pardon granted to some Nigerians recently. Admittedly, it was a padded pardon for Jonathan’s former boss, Diepreye Alamieyeseigha. Considering the enormity of Alamieyeseigha’s loot, his was an unpardonable pardon. That pardon is an open invitation to corruption. At the judicial level, the aphorism used to be: “Why pay a lawyer when you can buy a Judge?” The present pardon further lifts the aphorism higher: “Why listen to a judge when a presidential pardon awaits you?”

 

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