The NNPC’s $25 billion contract awards scandal

Dr Ibe Kachikwu and Dr Kachalla Baru at a public function.

THe letter recently written by the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, to President Muhammadu Buhari on alleged malfeasance in the oil industry has gone viral in the polity. This is especially because of what it portends for Nigeria and the Buhari government’s claims to integrity. In the letter, Kachikwu documented a number of alleged abuses of process in the Nigerian National Petroleum Corporation (NNPC) under Dr. Maikanti Baru, the Group Managing Director. They included insubordination and circumvention of authorities in the award of contracts which came up to about $25 billion, in gross violation of the NNPC Act. Baru, it was alleged, singularly awarded the contracts worth about N9 trillion, N2.3 trillion more than the country’s budget, without recourse to the board of the corporation.

Kachikwu also alleged that attempts he made to see the president, who is also the Minister of Petroleum Resources, were frustrated by some persons in the Presidency. He also raised so many scenarios which made presidential approval of the humongous contract awards unlikely. One of such was that even when the president was observing his medical vacation abroad and had transmitted the Presidency to then Acting President Yemi Osinbajo, Baru still claimed that he approved the controversial contracts. But perhaps the most awkward development is that the Presidency has given no identifiable or coherent response to the allegations. The closest to a response by the Federal Government was a private meeting between the president and Kachikwu, on the one hand, and another one between Baru and the vice president, on the other. Then, there was a response on Monday by the Group General Manager of the NNPC, Ndu Ughamadu, who said that the NNPC board, the president or the Minister of State did not have to approve the contract awards, claiming that only the NNPC Tenders Board was empowered to so do.

The NNPC’s response was just an attempt at obfuscating the issues. The corporation, for instance, claimed that the contracts could not be so called because they were not expected to be presented to the board as contracts. But the unimpeachable fact remains that the sum of N9 trillion went out of the national coffers through a nebulous ‘internal process.’ Worse still, the government’s silence on this alleged malfeasance, the biggest in the history of Nigeria, suggests an attempt to make the revelations and their consequences for it a family affair. Many issues raised by the letter, which were further worsened by the NNPC’s outrageous response, call for concern. First, what kind of systemic laxity would allow a single individual to approve contractual dealings in the oil sector that were more than the country’s budget? The national budget of N7.3 trillion went through a number of gruelling exchanges between the executive and the legislature before it was passed. There were recriminations between the two arms of government.

That being the case, how could bigger financial dealings with equally huge implications for the growth of the country be the result of mere dialogue between two individuals, namely President Buhari and Baru? Shouldn’t there be a bigger vetting process, for instance, through the National Assembly, before the contracts could be awarded?  Does the NNPC Act give the duo the authority to bypass the NNPC board to approve and award contracts of such stupendous worth?  If the board is a mere rubber stamp as painted by the NNPC, why appoint members to it in the first place?  Indeed, what kind of law would allow  the NNPC GMD to bypass the board and the supervising minister and approve transactions in excess of the country’s budget? Has such a law not covertly made a national Frankeinstein monster of the NNPC leadership? Again, did the transactions pass through President Buhari? If the GMD was not mandated by law to discuss them with Kachikwu or the board, there really would have been no reason to do so with the president.

The Buhari government must act fast and tell the nation its role in the said contract awards. Already, there have been insinuations that the contract awards were the All Progressives Party’s (APC) own manner of amassing funds for the 2019 general election. More fundamentally, for a government like Buhari’s which advertises its alleged purity of pedigree, it can ill afford to keep mute in the face of this alleged corruption. Already, there are sarcastic comparisons of the alleged heist in the NNPC with the one allegedly perpetrated by former Minister of Petroleum, Diezani Alison-Madueke. Sarcastic comments are being made to the effect that two ministers handling the portfolio, one former (Madueke) and the other current (Buhari), have both soiled their hands. This is a distressing development.

The allegation that Dr. Kachikwu was prevented from seeing the president needs to be addressed. In the life of this administration, many such allegations have been made. Ministers are alleged to queue up to see the president, failing to do so in most cases. It is alleged that only those who have personal relationships with the president or his kitchen cabinet, whom many refer to as a cabal, get to see him to review the assignments he gave them. This would make anyone wonder what kind of government is being run where the boss does not get to talk to his employees on how far they have been able to go in achieving his projected vision. The allegations levelled against Baru are too weighty to be explained away in the peremptory manner the NNPC did on Monday. They puncture the government’s claim to a moral right to conduct an anti-corruption war. If left unaddressed, the allegations are capable of dashing any hopes of redemption for the country.

Also Read:

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