Is it possible for a government official to become a problem to the people they pledge to serve dutifully and diligently? In the words of Elvin Mirzayev, economies that are afflicted by a high level of exploitation or corruption, which involves misuse of power in the form of money or authority to achieve certain goals in illegal, dishonest, or unfair ways, are not capable of prospering as fully as those with a low level of corruption.
The government officials that are eaten by this disease (exploitation or corruption) are problems already. This position is also corroborated by Paolo Mauro in the piece (Why Worry About Corruption?) that he wrote for the International Monetary Fund (IMF), February 1997. He wrote about possible causes and consequences of corruption; and evidences on the extent to which corruption affects investment and economic growth as well as on how such influence governments in choosing what to spend money on. Government officials that love rent seeking (the extra amount paid over and above what should be paid for value), or trade restrictions in a manner that give undue advantage to few rent givers, or policies that allow poorly targeted subsidies, or price controls deliberately done to lower the price of some goods usually for social or political reasons, or multiple exchange rate practices and forex allocations that gives some privileged few opportunity to make margins or enjoy rents. Such acts are very serious problems that can never allow an economy to develop and grow. It is in this dilemma that one can locate Nigeria’s situation concerning its oil and gas industry.
It is a known fact that a very good economic result will require a clever and pragmatic mixture of market incentives and good state direction. When attempts are being made to repair an economy, serious governments don’t fold hands, or go to sleep, or allow handful of individuals exercise absolute powers that can give rise to sleazing and skullduggery. Even regulators must have other very effective layers that are constantly checking their activities and ensuring they have not become compromised and they are not instruments in the hands of saboteurs or they themselves becoming one. But Nigeria’s leadership, for ages, hasn’t shown capacity in this regard. It is only when the populace beat the drums of war that they will be calling meetings and/or threatening actions against protesters. Paolo Mauro goes further in his submission: “corrupted economies are not able to function properly because corruption prevents the natural laws of the economy from functioning freely. As a result, corruption in a nation’s political and economic operations causes its entire society to suffer”. For years, Nigerians are suffering from the activities of players in the energy and power sectors, the basic sectors that are in charge of ensuring free-flow of productive activities and whose error of omission or commission has the capacity to lay prostrate a given economy.
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First of, the present tiff between Dangote and the regulators of the oil and gas sector, and the uproar it has generated, is a good one. For decades, Nigerians have been shouting concerning the attitudes and business models the regulators and NNPC have been unleashing and the yokes thereof that they have been placing upon the necks of over 200 million Nigerians. Even street urchins that know little or nothing about business have all been wondering why a producer of raw material (crude oil) would find it so difficult to refine or produce the quantity that it needs for its consumption. Upon all the crying of Nigerians, for decades, NNPC and the regulators are less bothered about the ‘market noise’. The seat of power too appears unmoved by the yearnings of the people. Perhaps, the stepping in of Dangote is a good counterforce on the side of the masses to muscle, this time, the missing force that will warrant a listening ear and a change of attitude. The elders have a say, Omo ina laa ran s’ina (literally, to deliver a message to a fire, you need a fire’s offspring).
For long, it is clear that the hands of the players in the oil and gas industry are not clean (considering the manner they run the industry for decades) and the regulators cannot exonerate themselves of allegation that they operate the headquarters of corruption in Nigeria. In the words of Festus Adedayo in his latest piece that I got in the course of writing mine, and he quoting Stephen Ellis, “by the late 1970s, an illegal trade in Nigerian oil flourished like a new bride. Corrupt politicians and military big epaulettes connived with NNPC officials to funnel Nigerian oil abroad. Between 2010 to date, Nigeria is estimated to have spent N11.35 trillion excluding other cost in other currencies which include US$593 million, EUR4.88 million and GBP3.46 million on renovations, salary payments and maintenance of refineries that are too crude to refine even a gallon of crude”. Since the 70s, it is illegal business as usual. No wonder the Nigerian economy is a perfect fit for the descriptions in the opening paragraphs above.
Dissecting the words of Farouk Ahmed, the chief executive at Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), how come he spoke gleefully in support of importation of refined products at a time all the oil and gas sector managers ought to cover their eyes in shame for not being able to put a stop to the importation embarrassment after years of promising to revive local refineries? And to add to the shame, he wrote off the efforts of a private establishment as inferior to the ones imported! How can a government prefer importation to local production and would be giving hand-outs as succour to ameliorate people’s sufferings (while nursing poverty) instead of working very hard to make local production very competitive? Any plausible logic at all in their (NNPC and sector regulators) position at all? For this not to be seen as deliberate sabotage by the combination of the regulators, the government officials, and the refined products’ importers (the Mafia-Malta), they must do something radical to ensure more than sufficient local productions, and very competitively too, to convince Nigerians that they are not the enemies of Nigeria.
On Saturday, July 20, 2024 at a press briefing, the President of Dangote Industries and the alpha of the 650,000 barrels per day refinery complex that is currently in the eye of the storm said: “another complaint was about the initial drop in diesel prices…” So the importation cartel and the regulators are not happy that Dangote Refinery made efforts to bring down the pump price of diesel; and the allegation that the Lekki refinery is being sabotaged by the regulators and the International Oil Companies (IOCs) cannot be far from the truth? Truth be told, the federal government, its agencies, the importation cartels, even international organisations that are suggesting policy directions to Nigeria are all suspects in the sabotage of Nigerian economy and the sufferings of over 200 million people. This is a subject for another day.
Now if it is difficult for the Nigeria’s government to check and regulate the excesses emanating from its MDAs, shouldn’t it be better for Nigerians to pressure the national assembly and agitate for capital punishment to be legislated as penalty for public office holders and their accomplices in the private sector? Should Nigeria go the way of Asian countries to treat corrupt government officials and their private collaborators? If this will be the next line of action to tow, there are proofs of several nations that have imposed the ultimate penalty for corruption. In the Philippines, the debate in the 17th Congress, in 2017, was about the reinstatement of the death penalty after it was abolished in 2006; and they are arguing whether or not to include plunder, treason, rape, drug crimes to the list of crimes. Such countries like China, North Korea, Iraq, Iran, Indonesia, Laos, Vietnam, Myanmar, Thailand and Morocco are some countries that frown seriously at acts of corruption that affect the finance or economy of their countries and extend capital punishment to even foreign officials and staff of international organizations caught in bribery and corruption activities. But do Nigeria need to go this extreme before the country’s public officials and their collaborators will call themselves to order? Will President Tinubu be able to rise to this challenge and tackle the oil and gas sector players, the regulators and the oily gangsters?
Ola Emmanuel is a business planning consultant