Why Buhari Would Probe Missing $20 Billion – Abe | Independent Newspapers Limited
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Why Buhari Would Probe Missing $20 Billion – Abe

Posted: Jun 7, 2015 at 12:01 am   /   by   /   comments (0)

Senator Magnus Abe, was representing Rivers South Senatorial District in Rivers State and was outgoing Chairman, Senate Committee on Downstream Petroleum Resources. In this interview with IGNATIUS OKOROCHA, he argues that oil subsidy is a scam, and argues for its removal. He also speaks on other issues. Excerpts…



The Petroleum Industry Bill (PIB) is one bill Nigerians are very expectant that the National Assembly would passed into law before winding up the tenure but it does appear the Bill will not be passed after all before the expiration of the Parliament. What is the fundamental problem holding this Bill from being passed?

Well, it is true that I am a member of the joint Committee on the PIB but the Chairman of the Joint Committee on the PIB is Senator Emmanuel Paulker and I think that the questions on the current state of the Bill and issues relating to the PIB should be directed to him. I will not like to speak on behalf of the chairman.

That’s okay. As an individual, if given the opportunity, would you like the Bill passed?

Of course, every Nigerian that understands the challenges of the Petroleum sector would want one kind of reform or the other and even if there would be no reform, one would like to have one kind of certainty. The truth of the matter is that as soon as you tell the oil industry that you are trying to make changes, people are not going to make long term investment, they are not going to make long term plans, they want to wait to see what those changes would look like and how it would affect their businesses. And this is a globally competitive industry, so you don’t keep your capital lying around. Because of the cost of the investment in the oil industry, plans are usually long term. So, if Nigeria is not ready, and Angola is ready, Brazil is ready, investors would move their funds to those places where the rules are clear and certain and invest there, because they can plan. So, I think the challenge that the PIB is giving to the oil industry is not only that it has not been passed, but also that it is being contemplated. So, if you are not changing the rules, we should say okay we are not changing the rules and drop it. If we are changing the rules then we need to make clear what the rules are so that people can make their plans. I think that is the core of the challenges that the PIB poses to the industry. So, it is not just whether I want the PIB passed or not, I want some certainty in the industry so that the industry can move ahead or whatever terms Nigeria wants.


Did you say the PIB is out to define that uncertainty?

I said that the fact that you have said you want to change the rules brings uncertainty. So if you have said you want to change the rules, that is to say you want to make a new law, then it is good to go ahead and make that law as quickly as possible. If you don’t want to make the rule it is Better to make the industry know that there is not going to be any change in the rules and so, you continue to plan with the rules you have. The problem now is not whether the PIB has been passed or not passed, the fact is that its mere contemplation, that it is hanging, brings uncertainty to the industry and that uncertainty is not good for the industry because it is a globally competitive business.

Nigerians are worried that despite the agreement signed by stakeholders in the Petroleum Industry on availability of fuel to parts of the country, Nigerians still wait endlessly at the filling stations for the product. What is responsible for this?

The reason for scarcity of petroleum products as we have been given to understand is the problem between the petroleum marketers and the federal government relating to payment issues. Like I said before, whatever solutions that we proffer that is not a long term solution will only delay the evil day a little, but at the end of the day, the problem will come back. So, I think until we proffer long term solutions to some of these challenges, I don’t think that we would be able to solve the problem of petroleum product scarcity in this country.

How has your committee intervened in this matter?

When it comes to the question of money, our power to intervene is very limited. We have intervened in the past severally. It always boils down to this people saying if we don’t have money we wouldn’t bring the product. It is a money thing. What we can do is very limited. At the heart of the problem are issues of transparency. How these operations are being operated are the issues in question. Like I have always said, luckily, the Nigerian people, I believe, have voted for a solution through the emergence of the new administration. So, let us wait and see how the new administration is going to handle the matter.

President Muhammadu Buhari once said he was going to revisit the audit report of the external audit on the $20billion missing oil money and suddenly after that pronouncement the former President Goodluck Jonathan’s administration started rolling out figures of how the money was spent. As a co-chairman of the Joint Committee that probed this allegation, are you satisfied with the report of the external auditors?

We had a joint committee here in the senate that investigated the oil subsidy issue and we made several recommendations to the senate and one of those recommendations – because I do say that the problems with the sector is from the top concentrating on the bottom wouldn’t solve the problem and we made recommendations that there should be changes at the top of the oil industry. The senate leadership did, in its wisdom, decide at that time that there have been too many reports, because our own report was coming after the House of Reps’ report, they decided that there is need to bring it up before the Senate, but it was never debated and those resolutions were never voted on in plenary. So, to ask me if I am satisfied with what is going on with the probe in the oil industry is a question I cannot say something about. I think most Nigerians believe that we should look more closely into how the resources of this country have been managed, particularly as it relates to the oil industry. So, even if the President didn’t say he is going to probe the scam in the oil industry, I think it will happen by itself, because Nigeria gets all its money from the oil industry and right now there is no money in the treasury. So everybody is going to ask where is our money, so I don’t think it is something that can be easily shoved under the carpet. It is too big for anybody to sweep it under the carpet. If the current government wants to make efforts to try to show that they did something wrong, I think that is in order and I expect them to try and do that while the books are still with them. But at some stage they have to let go of the books; when they are no longer in control of the books, other people are going to look into the same books and people may come up with a different interpretation of the same figures. So, the key thing is that the money is not there, if the money was there the noise would be less, but if the money is not there and all people are saying is the books, there is no way you are going to say they would not look at the books if they don’t see the money, and the money is not there. The excess crude account is empty; the federation is in deep financial crisis. So, as far as that situation exists, there will be issues as to where our money is and if anybody did anything wrong, that is why we are broke. It is like even you and your children when they have no money, there is no food everybody is frowning, they are going to ask you questions that they would not have asked if they had eaten and things were good.  So, I think that it is not about the President, it is about the Nigerian people. People can receive their salaries, contractors were not paid, people are grappling with all kinds of financial problems, the economy is in serious down turn, nobody has money, everybody is miserable. So, in that kind of situation, when you ask and they say o, oil price has fallen, people will say but oil price fell before, when other presidents were there and the Presidents went to the excess crude account and were able to manage that situation so that ordinary people didn’t suffer too much; so, how come oil price has fallen now and nothing seems to be going on.  So those are the questions that will lead everybody to the books. That is where the problem lies. It is not necessarily because President Buhari said he would look at the books. Nigerians are going to look. As long as there is this miserable situation in our economy, you can’t stop them from looking into those books.

This issue of subsidy has been a major problem in the country, is it necessary that government must continue to subsidize the PMS?

In my humble opinion, the whole issue of subsidy today is nothing but a scam. It serves no economic purpose, it serves no social purpose. It offers no benefit to the people of this country and as long as any government continues to make any kind of effort to manage it and control it and all that, they will still find themselves in the same hole that other people have been in, because to me, it is nothing but legal stealing. I have a business and what is happening with the subsidy is that the government comes into oil business and this my profit. That is what the subsidy is. I have a business, the Nigerian government is going to guarantee my profit; so, no matter how I run the business I present the books in such a way to say okay this is the money that I am suppose to make. What I am supposed to spend to be able to get this product, and this is the different that the government is going to pay me. There is no sensible government on earth that will go and participate in that kind of arrangement because the people must continue to take as much from you as they can and it is legal. If a man were to go and do his own business and he is going to borrow money from the bank, he is not going to borrow at the highest interest rate. He is going to borrow from the cheapest place to get money to fund his business. He is going to look for every possible way to try to cut his margins, but where you know that the government is going to guarantee the rate at which you are even going to borrow money – I will go to the bank and say on this particular loan, what is your upmost and say okay, write 15% on this one, but on this other one that I am using for my own business, take 3% of that one and remove it from this one. In the books I will show to the government, I say I borrowed money at 15% because that is the highest rate of the market or whatever, but for my own business that I am doing, I will press the bank to reduce because you are taking from here. So there is no way the government can understand everything that a private business is doing within it business. So the government sits down and do its business unless if you say we are setting rates and will make allowance for dollar, make allowance from this and from that and at the end of the day they make their profits and what is the benefit to the Nigerian people? Why can’t the refineries work? The refineries can’t work because people make more money if the refineries are not running. So, on every single score, the Nigerian people and Nigerian government are the ones losing out. The only reason the government will not complain is that the people in government are being serviced from the profit from the private sector to join in the collision or turn a blind eye to some of these issues so that the scam can continue to grow. So, for people that are by nature in that scam I don’t want to say that Nigerians are dubious but everybody knows that this is the most dishonest country in the world; So, for people that are by nature prone to take advantage of every rule in the book for you to now create this kind of scam for them to participate in is like the hyenas feasting on the carcass of a dead horse. Nobody is going to go away and nobody is going to let anybody come and drag that horse away from them.

What is the solution?

What is the solution, my brother! Is there subsidy on the rice you buy? Are you not eating? Is there subsidy on the cloth that you wear etc? why do we need subsidy on petrol come to think of it and who is benefiting from the subsidy?

But why does the parliament appear to be in support of subsidy removal anytime the matter comes up at a public hearing?

Yes, the lawmakers do that because the Nigerian people are not satisfied that the big people who are running the government are making any kind of contribution to running a more efficient government are denying themselves anything. Everybody is trying to take as much as they can.