Last weekend Tahir Guest Palace, Kano, played host to the country’s Energy Correspondents for a workshop on reporting oil and gas. This was at the invitation of Kaduna Refining and Petrochemical Company (KRPC) which has made it an annual event it organises jointly with the Kaduna State chapter of The theme this year was “NNPC in transition: Transformation and Media’s Role in Facilitating Positive Outcome.” Four of the five papers billed for the two-day workshop were delivered each by the new Managing Director of the Corporation, Idi Mukhtar Maiha, the former Head of Mass Communications Department of Ahmadu Bello University, Zaria, Dr. Suleiman Salau, the Executive Director (Operations) of the refinery, Shehu Malami, and this reporter.
The new Group General Manager of NNPC’s Public Affairs Department, Garba-Deen Mohammed, who was to speak on the role of the mass media in facilitating success in the latest reform of the oil and gas sector, was away in Port Harcourt where the Nigerian Guild of Editors he was the erstwhile president of was holding a conference.
Maiha spoke on the remit given to the management of our three refineries under NNPC’s recent reform to transform them from cost centers into profit making companies, Salau on the social responsibility of energy correspondents for the development of the oil and gas, Malami on how to prepare KRPC for success in its new brief, and myself on how NNPC’s seemingly unending transition can come to a happy ending.
On each day of the workshop Dr. Musa Bawa, the principal partner of Topdesk Consultancy based in Kaduna, conducted mind coaching and intellectual games for participants in between the presentations. The games were as much fun as they were stimulating and educating.
I opened my presentation with a reference to the editorial of New Nigerian of June 29, 1974 aptly titled “OIL MONEY: Honey or Poison?” This editorial, I said, is arguably the most insightful and prophetic editorial of any Nigerian newspaper since Independence. Sadly, I said, its prophesy that our corrupt and profligate ways of the post-civil war years of the early seventies – readers old enough would remember the Head of State, General Yakubu Gowon’s famous sound bite about money not being an object but how to spend it – can only make our oil money more poison than honey, proved too true less than a decade after it was written.
In the last 16 years oil and gas, it seems, have landed us in a predicament even worse than that of the seventies and eighties. For one, easy money from the twin commodities has afflicted us with so-called “Dutch disease” whereby our dependence on it had led to the hardening of our currency which, in turn, had led to cheap imports and made our exports uncompetitive and theretofore to the decline of our manufacturing and agricultural sectors.
Worse than our neglect of agriculture and manufacturing easy oil money has led to the entrenchment of waste and corruption in the country, the current “Padding-gate” unveiling in our House of Representatives being merely the latest of the unending corruption scandals in the country since the discovery of oil.
“Padding-gate” may be the latest in the country’s parade of corruption scandals but in size it hardly compares to the Oil Subsidy scandal of 2011. As scandals go, this may yet prove the Gold medalist – actually Platinum is more like it. Certainly, next to the perpendicular drop in the price of crude oil since last year nothing has depleted our treasury like the subsidy scandal.
The evidence lies partly in how the subsidy grew exponentially from an already high of 261 billion Naira in 2006 to at least 1.3 trillion in 2011. I say “at least” advisedly because different government officials and institutions gave different figures in their testimonies before the House of Representative Ad-Hoc Committee under Honourable Faruk Lawal which investigated the scandal and which in turn became a scandal all of its own; whereas the Finance Minister, Dr. Ngozi Okonjo-Iweala, said it was 1.3 trillion, her Petroleum counterpart, the all-powerful Dizeani Allison-Madueke, said it was 1.47, the Accountant General of the Federation said it was 1.6, the CBN said it was 1.7 while the Ad-Hoc committee said it’s own estimate was an incredible 2.59 trillion!
It was also instructive that whereas the subsidy gravy train started with only five companies, including NNPC, on board, the passengers doubled in 2007, almost quadrupled in 2008 and increased to 140 by 2011!
Again it was instructive that no one could say for sure what the daily consumption of petrol was before the Faruk committee; the oil minister said 53 million litres, NNPC said 35, DPR said 43 while the PPPRA said 24. The fact that the perennial queues at our petrol stations have disappeared since the recent removal of the subsidies in spite of the fact that the amounts available is nowhere near the least of these figures suggests that we have all along been blatantly lied to with statistics.
After taking our workshop through the history of the country’s oil sector going all the way back to 1908, i.e. before even our amalgamation in 1914, and analyzing its ills, I suggested at least three ways to turn it from a curse into a blessing. My suggestion was clearly no rocket science; transparent pricing of oil, as opposed to the many ill-defined factors PPPRA uses, including outrageous remunerations and severance packages for its top management and board, enactment of the 2012 Petroleum Industry Bill and, as the New Nigerian editorial in reference said, massive investment in agriculture. The only difference was I added education, with much greater emphasis on primary and secondary education. This invariably means a review of our revenue allocation formula in favour of states and local government compared to the Federal Government.
At the end of my presentation the KRPC managing director suggested that I find a way to reproduce the entire New Nigerian editorial I talked about because of its contemporary relevance and because he said I had referred to it more than once in my column. I promised I would as soon as possible. I thought today was as good a day to do so as any. So here we go:-
“It is commonplace to say that Nigeria is at the moment very lucky because of oil revenues. In a very real sense we have much more money than our system can absorb. Unofficial estimates put the figure added to our reserve this year at 2,000m Naira. In many essential respects this bounty has been a blessing. It has enabled us to pay some of our loans, liberalised commercial and industrial policies and has enabled increased revenue to be diverted to building of modern infrastructure commensurate with our executive capacity.
“But the reverse side of this coin is painful to contemplate. The nature and source of oil money put it in a class of its own. A few years ago a disturbing international report was published arguing in stark terms the future of all underdeveloped oil producing countries to make more than marginal use of their splendid fortune. No effort is involved in our part. It is the foreigners who employ their capital and skills to exploit this resource and we simply receive autonomous additions to our national income.
“Such un-worked for riches can land a country in trouble of a peculiar kind. There is soulless opulence of a few, in evil contrast to crushing poverty of the many. There is unimaginable corruption and disastrously wrong allocation of resources. Above all there is absence of hard work without which the country cannot pull itself together. In that sense the oil money becomes poison rather than honey. How will an economic historian 50 years hence explain the relative expenditure on agriculture and on various forms of so-called “culture” : All-Africa Games, Black Arts Festival and all the rest of it? He must conclude that we had taken leave of our collective senses.
“Happily, in the Nigerian case the situation is by no means irretrievable. We could deploy considerable energies and resources in producing a commodity which is more important than oil: food. We must at all costs get agriculture on the move again. There are millions of acres lying fallow when they could be used to grow food for our burgeoning population. The setting up of two River-Basin Commissions is a great step in this direction (although the staffing has ensured that the two schemes would not take off for some time).
“Nor are we unmindful of individual state efforts. But fiddling around with 10-15m Naira is just like one grain in a silo. We need a monumental plan. A 500m Naira plan with the help of say, Danish and Chinese experts under our direction would do wonders for grain production in this country. We may not have oil in 50 years. But to survive we must have food. The ground work can be done now.”
The reader will agree with me that this less than 500-word editorial, published in its famous front page one inch column down the left side, is as relevant today as it was 42 years ago. The big difference, of course, is that today, in spite the huge difference in the scale of oil revenue, money is an object. Another difference, of course, is that whereas in the seventies we frittered away our fortune on games and festivals, this time we did so on wine, women, exotic cars and private jets and on fancy private property.
As oil price begins to pick up we will, hopefully, this time learn the big lesson of the hard times our corrupt and profligate ways has landed us into.