‘We are losing FDI because of illicit financial flows’

Peter Egbule. Photos: twitter..


National Coordinator of Publish What You Pay in Nigeria, Peter Egbule spoke to KINGSLEY JEREMIAH on the level of impact that illicit financial flows have on Nigeria

The oil and gas sector is fingered as a major platform that is aiding illicit financial flows (IFFs). Are there justifications for this assumptions?
Loosely explained, illicit financial flows are financial transactions that are not approved in the mainstream economy; they are proceeds of crime and illegal activities and they differ from country to country. In Nigeria, we discuss IFF in relation to the oil and gas industry because the sector is the mainstay of our economy. It is a fact that transactions in the oil and gas sectors are huge and beyond that, they are shrouded in secrecy. Due to the technical or professional dimension of the sector, a lot of people do not have understanding of that sector, and because of this lack of understanding, one cannot question whatever happens there. The few privileged and fortunate ones who got involved in oil and gas in Nigeria are the ones that are dominating the sector, and this is largely because a lot of them have personal interests.

For instance, in Saudi Arabia, the government controls 100 per cent of the transaction in the oil and gas, but in Nigeria there are private entities even as some private investors get their allocation of oil blocks illegally.There are a lot of notorious activities going on in the sector, ranging from exploration of the crude, to importation of refined products. When you talk about IFF in Nigeria, it has a very strong role in oil and gas because of the volume, and because it is loosely controlled. So, it makes it easier for people to commit a lot of notorious activities within the sector.

Governance is a continuum. It is one thing to proclaim an interest and another thing to follow it through to ensure that punitive measures are put in place. For the past 20 years, there have been arguments surrounding the Petroleum Industry Bill, which has been divided into four and the four of them have different aspects that need to be controlled within the oil and gas sector. But what we have is an important sector being loosely regulated. The current Petroleum Act is as old as 50 years and we all know that the dynamics then are not same with what we have now, just as the pricing and interests are not the same.

The energy dynamic across the globe is changing by the day, and you have an economy that its mainstay is oil and gas. The question is, what measures are we taking to tackle corruption in the sector? You then have a policy that guides investment and revenue disbursement. The NEITI report indicting NNPC was carried over from 2015 to the 2016 report. NNPC received royalties from the NLNG, which is close to $15b. And the law says that the NNPC is operating on behalf of the equity of the Federal Government. Now, the NNPC received on behalf of the Federal Government and decided to spend un-appropriated funds on behalf of the Federal Government without remitting into the Federation Account. This is happening because there are no consequences and I believe that some people are benefitting from this dysfunctional situation.

The Rivers State Governor, Nyesom Wike recently accused a General in the Nigerian Army of sponsoring the smuggling of petroleum products. Can this be true?
What the governor said is not new. The level of impunity going on in the Niger Delta is disheartening. There is currently a brand of fuel called slow fire in the Niger Delta. It has been established to be brand-refined project that has now been sold beyond the Niger Delta. I am not sure that such level of impunity will be going on there without the state apparatus being aware. I think there is some level of agreement between the security people there, and those who engage in the illegal activity. And as such, if the chief security officer of a state made that statement, I think it has merit. There are reasons to believe the governor because activities at such level, where you move in tankers to filling stations to sell products cannot be done in secrecy. Also, when you refine oil you don’t refine in secrecy; it involves a lot of activities.

NNPC has a pact with the DPR and the Custom to checkmate bunkering and smuggling. To what extent can this address the challenge?
I am glad of the collaboration, but in a country where goods are allowed into the country without checks not much can be achieved. I asked myself what is the big deal in having a unified database? The collaboration is good, but there are some fundamental things that need to be done, and that cannot be done by individuals or separate agencies. It has to be led by the Federal Government and in that case, there has to be a unification of our system. The intention is good, but the implementation seems not to be feasible.

Why are the international laws, which the country is signatory to, not effective in tackling IFFs, and how can ICT the system in this direction?
Recently, the NFIU was established to checkmate crime alongside other agencies. But the fact is, we do not put people who are interested in the growth and survival of the country in the right places, we are just wasting our time. Systems are prone to manipulations because human beings give instructions to computers. There are some people who think that they own the country. Until we have a system where the institutions are stronger than individuals, and people are answerable for their crimes, we won’t go anywhere. There are people who should lead our demands to the international community, but some of these people have been compromised by the perpetrators of the crime.

All said, I don’t think Wike was making those allegations in vain as the chief security officer of the state. There are crimes that people commit in this country and they go scout free, while the same crime attracts death penalty in other countries. It is also unfortunate that right from the family, church and community levels, we celebrate thieves.

The global country will not act on any issue within our country except we invite them to act. We have to demand that they act because if we don’t demand, they will not act. Other countries that belong to the same international community are benefitting from it because they make demands.

So what are the implications of IFFs on our economy?
Financially, we are bleeding to death as funds that should be used to develop the country are slowly being moved out of this country. Beyond that, there is lack of confidence on the part of investors. Genuine investors would want to invest in a country where they can monitor their transactions; where they think that their money is safe, and where they are policies and institutions that would hold people accountable in the event of defaults. So, all these are pointers that the economy is not secure and safe for them to invest in. So, we are losing Foreign Direct Investment (FDI) because of IFF.

In this article:
FDIPeter Egbule
Receive News Alerts on Whatsapp: +2348136370421


No comments yet

Related