Grand corruption: Nigeria’s oil revenues

The Nigerian government just released a Pricewaterhouse Coopers auditing report on one of Nigeria’s biggest corruption scandals of the past decade. Feyi Fawehinmi takes it apart:

So what did it find? That the total revenues for the period in question were $69bn and not $67bn as stated by SLS. It had also remitted $50.8bn and not $47bn as initially thought. So, there was still a gap of roughly $20bn to be explained as before.

[…]

But who or what gives NNPC the right to withhold nearly 30% of the money it receives on behalf of Nigeria and then spend it as it wishes? Here we have a goat locked in a room alone with a yam and no one to supervise what’s going on.

PwC’s opinion is that this practice of withholding money and then spending as it sees fit is highly dubious and that the NNPC act needs a legal opinion to determine whether it has the right to do this. What stops NNPC (the goat) from withholding 50% of revenues (the yam) and then telling us later that it spent it on one thing or the other? Based on this, nothing.

If you are interested at all in the political economy of Nigeria, be sure to read the whole piece, its great. Hat tip goes out to Alex Thurston of the Sahel Blog who has collected several other great resources on the scandal, if you are not up to date on it.

Source: This Yam, This Goat, This Country: PwC and NNPC – Part 1 | Agùntáṣǫólò

[Update]

Alex Thurston also just published a piece looking at the balancing act Nigeria’s incoming president, Muhammadu Buhari, will have to perform regarding corruption:

It has been to the APC’s political advantage to build a diverse coalition – it helped enable Buhari’s victory this year (whereas in 2011, he won only the far northern states). But when it comes to fighting corruption, the coalition will complicate matters, because some people have joined the APC expecting to profit, both politically and financially. If those people don’t get the rewards they expect, that could cause political problems for Buhari, whether in the legislature, with the states, or on the road to 2019.

Again, well worth your time.