Nigeria audit into ‘missing’ oil revenues arrives

Goodluck Jonathan, the Nigerian president, has received a long awaited audit into billions of dollars of allegedly “missing” oil revenues just 11 days before a closely fought presidential election.

The auditor general was asked to release key findings of the audit “within a week”, Nigerian media reported.

The long delayed completion of the report coincides with a growing furore in the final days of campaigning over Mr Jonathan’s stewardship of Africa’s largest economy, which has been battered since last year by the falling price of oil, billions of dollars of foreign investment outflows and a depreciating currency.

The opposition All Progressives Congress (APC), whose presidential candidate, former military ruler Muhammadu Buhari, has positioned himself as a strongman who can rein in corruption and end Nigeria’s terrorist insurgency, is calling for the report to be published in full ahead of the 14^th February polls.

PwC, the international accountancy firm, was commissioned to carry out the audit last March after Lamido Sanusi, then governor of the Central Bank, publicly questioned discrepancies of more than $1bn per month between oil sales and income.

Mr Sanusi warned that the alleged shortfalls — up to $20bn between January 2012 and July 2013 — meant that the country’s foreign reserves were under pressure, even though Nigeria should have been benefiting from the soaring price of oil and saving against an eventual fall.

The allegations prompted a political storm in Nigeria. Following the revelations, Mr Jonathan suspended Mr Sanusi, now the Emir of Kano, before his term as governor ended last June.

The president described the PwC report, which was commissioned on the advice of Ngozi Okonjo-Iweala, minister for finance and the economy, as “voluminous”.

“The auditor general will have a look at it and within a week let us have key highlights because the media will want to the know the key findings,” he said, and pledged to push through oil industry reforms that have been held up in the National Assembly for years.

But the APC insists that the entire audit, rather than just “key findings”, should be made public. The party has made curtailing mismanagement and fraud a centrepiece of its campaign to prise power from the People’s Democratic Party in what are expected to be the closest elections since Nigeria’s transition from military rule in 1999.

“Our position is that a full report should be submitted to the public. Everyone should see it to reassure us that there is nothing they are hiding,” said Bukola Saraki, an APC senator who sat on the senate committee investigating Mr Sanusi’s allegations last year.

The controversy surrounding missing oil revenue was revived again last week when another former central bank governor, Charles Soludo, wrote a long public treatise alleging that an even larger sum than $20bn had been squandered, prompting a furious public response from Mrs Okonjo-Iweala.

Experts on Nigeria’s troubled oil industry said the audit is unlikely to provide final clarity over how much went missing because it had narrow terms of reference. It covers some of the money Mr Sanusi suggested was owed to the treasury but does not address opaque crude oil swaps — where crude oil is exchanged for refined petroleum imports without cash changing hands — or the legality of production agreements which Mr Sanusi contended had transferred control of revenues and profits from state-owned assets into the hands of private companies.

“The key questions relating to crude oil swaps and strategic alliance agreements that Sanusi raised were not on the table,” one expert said.

Credit: FT London (UK-04 Feb 2015)