The Need for a Presidential Assent of the Federal Audit Bill

Communications August 25, 2020 0

By Bukola Afeni

There are several benefits to be derived by the time President Muhammadu Buhari finally appends his signature to the Federal Audit Bill, passed by the National Assembly (NASS).

The Eight (8th) Senate, had in May 2018, passed a Bill for the establishment of the Federal Audit Service Commission, in line with Mr. President’s government’s anti-corruption fight.

The Bill was read the third time and passed at a plenary session presided over by then President of the Senate, Bukola Saraki. The Senate mandated its leadership to engage the executive with a view to getting Buhari to sign the bill before the end of the 8th NASS.

Chairman of the Senate Committee on Public Accounts (then), Matthew Urhoghide, while presenting his report, said: “This Bill is very important to the nation as passing it into law will form the bedrock for fighting corruption, which is one of the cardinal objectives of the President’s administration.

 

Nigerian President Mohammadu Buhari

“It will empower the Office of the Auditor-General of the Federation, who has the constitutional mandate of auditing all accounts of the federation to nip corruption in the bud, ensure transparency in government transactions.”

Urhoghide added: “The Bill will address acute manpower shortage, existing in the Office of the Auditor-General of the Federation and bring it in tandem with supreme audit institutions and international best practices, as obtained in other climes such as South Africa, Ghana, and the United Kingdom.”

The Audit Bill, for the records, was not new to the 8th Senate. It was first passed by the House of Representatives in April 2016 and transmitted to the Senate for concurrence. The Senate passed the Bill on Thursday, March 1, 2018. But due to disparities in the version passed by the two chambers, a conference committee was set up to reconcile areas of differences. The Bill was eventually harmonized and passed by both chambers. The harmonized copy was forwarded to Mr. President for assent on January 8, 2019.

Sadly, the Audit Bill has since become orphaned, two years after its passage by NASS. The Bill was prematurely ‘murdered’ by the refusal of Mr. President to give it his assent. The Bill, among other things, will greatly assist in blocking revenue leakages and curtail corruption, when it finally becomes a law. Civil Society Organisations (CSOs) such as Connected Development (CODE), has always been in the vanguard of anti-corruption.

Specifically, CODE, in collaboration with OXFAM Novib, is galvanizing Nigerians against corruption, through its various advocacy programs, one of which is massively mobilizing citizens to support the entrenchment of an audit law. It has since kick-started an online campaign, soliciting Nigerians to sign a petition, with a view to pressuring the government into assenting to the Audit Bill.

CODE noted that the Office of the Auditor-General for the Federation plays a vital role in public financial management and anti-corruption measures, especially by ensuring compliance with financial rules and regulations and due process in public expenditure.

It, however, said that, currently, political interference and Constitutional constraints have limited the independence and functioning of the AGF. “The AGF currently lacks the oversight powers to enforce its mandate and there are no sanction measures against defaulting bodies and persons in place. This results in gross financial recklessness and public fund embezzlement that deprive the Nigerian government and people of money needed for development, in sectors such as health and education,” it added.

According to CODE, “the Office of the Attorney General of the Federation (OAGF) reported that 65 MDAs had never submitted their financial statements for audit since January 12, 2017, when he assumed office. “Furthermore, the 2017 Audit Report published by the Office of Auditor General for the Federation had defaulting MDAs rising to 265, up from the 160 defiant ones in 2016.

“The AGF report noted that as of April 2018, 109 agencies had not submitted their financial statements beyond 2013, while 76 agencies last submitted for the 2010 financial year.”

While calling on President Buhari to assent to the Audit Bill, the civil society body, said the passage of the Bill will be a major feat in the fight against corruption and would ensure that MDAs submit their yearly audited financial accounts to the Auditor General for the Federation. Hence, preventing corruption, illicit financial flows, bribery, abuse of public office/trust, money laundering and mismanagement of public funds as reported in the Malabu/Dan Etete Case.

Similarly, both the Senate and House of Representatives Public Account Committees, have insisted that the Audit Bill that was passed in the 8th Assembly, which the President did not assent, remains very sacrosanct and would be resuscitated by the 9th Assembly.

The Chairman, Public Account Committee of the Senate, Sen. Urhoghide, and his House of Representatives counterpart, Hon. Busayo Oluwole-Oke, who co-chaired a session of stakeholders on the Audit Bill, said the 9th NASS will breathe a new life into the Bill and ensure its passage again.

Both Sen. Urhoghide and Hon. Oluwole-Oke lamented that the nation’s current audit practice does not meet the global best practices and that necessary reforms that would empower and enable the office of the Auditor General of the Federation to function optimally and efficiently are imperative.

They spoke at a 3-day Stakeholders Consultative/Technical Session on the Audit Bill organized for members and staff of the Senate, House of Representatives Public Account Committees, and the Office of the Auditor-General of the Federation (OAuGF) in Abuja, last October.

Head, Technical Support, Partnership to Engage, Reform, and Learn (PERL) Engaged Citizens (EC), Mr. John Mutu, who facilitated the session explained that it was aimed at finding a common solution to ensure that the Audit Bill succeeds in becoming a law.

Mutu explained that the main objective of the session is to provide a platform for the National Assembly’s Public Account Committees (NASS PACs), the Office of the Auditor-General of the Federation (OAuGF) and the Presidency to reflect and review the Audit Bill, so as to identify areas of concerns that prevented the President from giving his assent to the Bill.

At the session, Urhoghide, noted: “We have to ensure proper auditing of the spending of public money. If we strengthen the office of the Auditor-General, it will block leakages and we will save a lot of money and this will also check corruption drastically”.

On his part, Oluwole-Oke said if the Bill becomes law, it would enable the Auditor General to carry out his duties very efficiently and effectively. “Unfortunately, the President withheld his assent even without giving reasons. Now the Bill is dead constitutionally. But we shall resuscitate it since our House rules give us the provision to start from where we stopped in the 8th Assembly,” he pointed out.

National Team Leader, Engaged Citizens Pillar (ECP) of DFID’s Partnership to Engage Reform and Learn (PERL), Dr. Adiya Ode, during the auspicious session, noted that having the audit law in place would strengthen the Auditor General to perform his functions well, and also send a signal to corrupt people that they would be exposed and prosecuted.

Experts and scholars in their various presentations during the technical session, equally maintained that without the audit law in place, it might be very difficult to achieve thorough auditing and that the nation’s revenue would continue to leak, particularly in the government agencies that generate revenue for the nation.

It is incontrovertible that the absence of an audit law has given rise to impunity in the use of public resources in several MDAs. This is evidenced in the limitless numbers of probes conducted on key agencies of government, which completely indicted them of malpractices of different sorts.

The absence of proper auditing in the MDAs is also responsible for the fusion of unwarranted projects in the budget of most MDAs. Projects are not subjected to either procurement, financial, or performance audits.

It is therefore incumbent on the President Buhari-led government, to activate every necessary mechanism that will bolster its anti-graft fight.

The country direly needs a robust, and well-articulated audit law that will not only guide accounting officers and other responsible parties involved in the MDAs on the standard procedures in the application of public funds but will also encourage performance in programs and budgeting in the MDAs.

That is why Mr. President must once again, diligently re-scan the Audit Bill, carefully identify grey areas in the current Bill, and then facilitate the process for quick harmonization of the perceived grey areas with NASS, before proceeding to sign the bill into law.

Having a ‘progressive-defined’ audit law in place will indeed serve as an elixir for his government’s war against corruption.

GENDER RESPONSIVENESS TO COVID-19

Communications August 13, 2020 0

Tosan Begho

Gender inequality amongst women and girls has been and still is a very prominent issue around the world and now with a worldwide pandemic, the impact on women and girls is multi-dimensional meaning the responses have to be suitable to tackle the different areas women and girls have been affected. A gender-responsive approach requires empowering women and girls by ensuring that they know the rights, services and resources they are entitled to.

COVID-19 is hitting hard in sectors where the majority of workers are women (70% of nurses in Africa are women), meaning a gender-responsive social protection response is fundamental.  Women and children are disproportionately affected by poverty the most and at a  time where women’s equal rights are being relegated, equal representation in all COVID-19 response planning and decision making, should be a priority. Countries should Integrate a gender assessment in all country assessments to understand the impact of COVID-19 on women and girls, including economic impact, and how to address it effectively. In addition to this, special funds to support emergency relief for women and their business should also be implemented.

Many women work in the informal sector, which increases the negative effects of COVID-19 on them; for example,  the closure of markets, borders and curfew due to their economic insecurity, supporting African women to embrace digital lifestyle and helping them grow and continue their business online should be done by providing digital entrepreneurship programs/training, expanding free internet access to increase access to online tools and education for women and girls. This will help them to be more informed and educated.

Gender-based violence has increased during this period of lockdown due to  women being trapped with their abusers and services to support victims are being disrupted or made inaccessible. Designating domestic violence shelters as essential services and increasing resources to them,  should be part of the response.

A pandemic amplifies all existing inequalities and only shows how important it is for every country to empower women and in order to do that, every COVID-19 response plans and every recovery package and budgeting of resources, needs to address the gender impacts of this pandemic, meaning including women and women’s organizations at the heart of the COVID-19 response,  and transforming the inequities of unpaid care work into a new, inclusive care economy that works for everyone. Women need to be empowered for the economy to grow, for the world to grow and most importantly for the mere fact that they are human.

Hamzat Lawal Listed as a Global Malala Fund Education Champion

Communications August 4, 2020 8

Following his advocacy for policy and programmatic solutions in the education sector, Follow The Money Campaigner and CODE’s Chief Executive, Hamzat Lawal, has been listed as a Malala Fund Education Champion with 57 others from around the world to accelerate progress towards girls’ secondary education.

Hamzat Lawal was named alongside other notable Nigerian campaigners: Olabukunola Williams, Executive Director, Education as a Vaccine (EVA) and Benjamin John, Programs Manager, Restoration of Hope Initiative (ROHI).

This announcement was made by the Chief Programmes Officer at Malala Fund, Maliha Khan, on the Malala website. According to Khan, as COVID-19 threatens to force millions more girls out of school, Champion-led programmes and advocacy work is now even more important. 

Reacting to the announcement, Lawal said “it is an honour to be listed to contribute to the fight for a right to education, especially for the girl child in Africa. The increasing number of out-of-school children especially in Nigeria’s North, continues to be an issue of great concern. Statistics show that for every 100 boys of primary age out of school, 121 girls are denied the right to education, worsening gender-based discrimination and putting girls at a disadvantage. Issues of water, sanitation and hygiene, and in many cases, insecurity affecting the delivery of education in conflict affected areas, are also factors driving children – particularly girls – away from the classroom.

Lawal will use CODE’s Follow The Money model to train and launch citizen-led teams to identify barriers to girls’ education in Adamawa state, northeast Nigeria. The team will advocate for and track the State’s spending on education and encourage government officials to invest in gender-responsive school infrastructure in creating conducive learning and safe space for girls to reach their full potential in life. 

Education has remained one of Follow The Money’s focal thematic areas, through which the initiative has facilitated the provision of several school amenities and infrastructure across grassroots communities in Nigeria (through several social accountability mechanisms). It also led civil society campaigns for the amendment of the Universal Basic Education (UBE) Act. Hamzat Lawal has also championed and co-organized other key campaigns for girl-child education in Northern Nigerian stressing that even during crisis, Education cannot wait for girls. 

Virtual Conference on Rebuilding Trust in Institutions

Communications August 3, 2020 5

Event Focus:

The picture of basic public service for the average person in Nigeria is bleak.

Every year, the Nigerian government budgets millions of naira on constituency projects, yet there is little to show for the improvement of public service delivery. A large portion of the budget (which funds sectors like healthcare, education, youth employment, etc) is believed to be syphoned by corrupt government officials, creating a huge trust gap and leading to citizens apathy. How taxpayer’s naira is actually being spent is a large mystery. The average citizen has very little visibility into where taxpayer money is going.

This situation has prompted a new look at the role of trust, as well as its relationship with governance and ways of restoring and rebuilding trust in different contexts.

Trust is the mechanism that makes society thrive. Nigeria’s institutions are suffering from a sharp decline in public trust. In times of disconnect and distrust between citizens and governments, the importance of trust is only increasing. But can we truly reach it? How can governments interact better with their constituents?

The event sparked deeper conversations about the culture of mistrust in the Nigerian system built over decades and began a conversation on charting a way forward to rebuilding trust in government institutions.

Speakers:

  • Deputy Governor of Kaduna State, Dr. Hadiza Balarabe
  • Senior Program Officer, MacArthur Foundation, Dr. Amina Salihu
  • Board Member, Ministry of Finance, Dr. Joe Abba
  • Investigative Journalist, Mr Fisayo Soyombo
  • CODE’s Chief Executive, Mallam Hamzat Lawal.

The Webinar was moderated by Kevwe Oghide, CODE’s Communications Lead (CODE).

Quotes from Speakers:

Dr Hadiza Balarabe: (the role of Government)

The issue of trust in public institutions is not peculiar to Nigeria alone as many countries around the world are also under pressure to meet rising citizens expectations. She however stated that the Kaduna Government has rebuilt trust by providing functioning primary healthcare centres, laying-off incompetent teachers and revamping the education system in the State. She noted that signing up with the Open Government Partnership has also fostered the state’s culture of transparency and accountability.

Dr Balarabe noted that trust has been rebuilt because young people are at the fore-front of industrialisation in Kaduna State and they have been delivering enormously for the State. Adding that because of the level of trust built, Kaduna has attracted over $500,000 in investment. Kaduna also publishes her annual audit report yearly, organises town hall meetings to get feedback from the people.

The impression that citizens have of government officials keeping public funds for themselves is quite unfortunate. In Kaduna, we are trying to dispel this misconception by reforming the public sector, and entrencingh merit in our recruitment process of public officials.

“We will continue to restore confidence and rebuild this trust in our people by committing to being reliable, responsive, transparent and having better regulations.

Dr Amina Salihu (on the role of Civil Society)

Trust is earned as a result of being accountable, responsive and capable and civil society organisations are strategic pathfinders who need to enable citizens to recognise their right to access basic needs and improved public services and how they can use their voice and actions to drive change.

On the role of citizens; Citizens have a role to play by not being cynical when actual progress is being made, paying attention to politics, participating, rejigging our federalism and changing the electoral system. “We need to give a lot more chances to women and expand the space to change how Government is structured.

Dr Joe Abah (on the role of citizens and other issues):

The decline in trust is traceable to a number of things and reasons, and issues like the current corruption allegations in NDDC awarding billions to themselves in so called COVID- palliatives will continue to dispel public trust.

He opined that leaders must take initiative, rise to the occasion of responsibility and show examples for people to start believing in the system, stressing that there is the need for public officials to openly declare their assets.

Government constantly going against its laws and policies is a breach of trust. For example; the recovered funds from Abacha loots were shared without a clear identification database where citizens can see how it was being shared.. What’s worse is that it was shared in cash which goes against the government’s rules on cashless banking.

On the role of the citizens in building trust,; “You can only rebuild trust by trusting, it is important for citizens to hold the government accountable and monitor them. Even if you don’t trust the government, we need to continue to engage and also put in mechanisms to make it difficult for people to breach trust”.  

Mr Fisayo Soyombo: On the role of the media

Although the media has a huge responsibility to play, the Government has the bulk of the job. He added  that people who want trust have to earn it.

Most of the things that we consume as news are actually PR. This shows that journalists are being manipulated especially because they are not well paid. Government must be responsible for providing better governance, the media must ensure that public institutions are not deceiving citizens by engaging more investigative reporting. While stressing the need for more investigative reporting, he called on the public to support good journalism especially with funding. “If we want a media that is more alive, people have to support good journalism.” He also encouraged journalists to be objective in their reports.

He noted that we need a value-reorientation in this country.

Hamzat Lawal, Chief Executive, Connected Development:

In 2019, what we learnt engaging government MDAs post elections informed our overall objective at Connected Development (CODE), which was to begin a campaign that was intended to increase trust among citizens and government. CODE’s strategy was to create platforms for informed debate between public institutions and citizens and also advocate for more government agencies to leverage digital communications to foster trust, increase transparency and ensure better accountability. This has led us to organise this conference that seeks to increase conversations and raise citizens and government’s consciousness towards rebuilding trust.

Kevwe Oghide, Moderators Conclusion based on Deliberation:

Building Stronger institutions ultimately increases trust and When trust is higher, behaviours become more constructive; people are more willing to cooperate and support government’s initiatives.

 We therefore need to consider how development goals can be achieved when systems work and faith in institutions increases. There is a role for everyone in rebuilding trust and we hope that this conversation can snowball into bigger discussions in smaller or larger groups so people can consciously think about trust – in their interactions with the society and their role in building it, trust is key.

 It may not be a total cure; transparent and accountable governance offers a glimmer of hope against the flood of public mistrust. Constant communication has the possibility of opening public institutions to greater public understanding and appreciation.

2019 Annual Report: Rebuilding Trust in Institutions

Communications July 28, 2020 32

2019 Annual Report: Rebuilding Trust in Institutions

In 2019, what we learnt engaging with government Ministries, Departments and Agencies a year before informed our objective for 2019, which was to begin a campaign that was intended to increase trust among citizens and government. CODE’s strategy was to create platforms for informed debate between public institutions and citizens and also advocate for more government agencies to leverage digital communications to foster trust, increase transparency and ensure better accountability.

We hope that we can contribute our quota to increasing citizens and government’s consciousness towards rebuilding trust.

Hamzat Lawal, Chief Executive, CODE

Click here to read full report.

2019-Impact-Report-Upload-2

Researchers and Consultants at Connected Development – Girls’ Education Research Study

Communications July 6, 2020 0

Researchers and Consultants at Connected Development – Girls’ Education Research Study

School girls in rural adamawa

OVERVIEW:

The North-East (NE), Nigeria has remained one of the least developed regions in the country.  As of 2019, according to the National Bureau of Statistics, the poverty rate in the region was above 71%, the highest in the country, while as of 2020, 60% of Nigeria’s 13 million out of school children are in the region. The region also has the lowest literacy rate across the country at 34%. Girls are most affected in the region education-wise. Most of them are out of school and cannot complete primary and secondary education following so many factors including inherent traditional societal barriers, early marriage, continuous insurgency in the past decade, as well as issues of affordability, availability and accessibility to schools.

To address the barriers to girls’ education in the region, CODE is currently implementing the project, “Increasing Girl-child Primary and Secondary Education Enrolment and Completion in Adamawa State,” which is funded by The Malala Fund. The project aims at facilitating girl-child education enrolment, access and completion through activating accountability channels for gender-responsive service delivery in schools, addressing traditional/cultural barriers to girls’ education and high-level governmental engagement on improving girls’ education.

Download Request for Proposal

Policy Brief: Strengthening the Office of the Auditor-General

Communications June 15, 2020 0

Policy Brief: Strengthening the Office of the Auditor-General

Nigeria’s inability to transform its resources as shared wealth and prosperity for all, is making it difficult to block financial leakages, as a large chunk of its earnings are being pocketed by a few and transferred illegally to other countries.

Despite the nation’s huge resources, Nigeria loses $18b annually to illegal movements of money or capital from the country– especially through the oil and gas industry, yet very little attention is paid to this illicit financial flow.

Read our Policy Brief on why the Nigerian President and the Senate need to assent the Federal Audit Bill that will enhance the office of the Auditor-General of the Federation to sanction government agencies that default audit policies.

Download Here

MHM: Periods Do Not Stop In Pandemics

Titus Tukurah June 3, 2020 2

MHM: Periods Do Not Stop In Pandemics

Menstrual hygiene management can be challenging for women and girls in developing countries, where access to clean water and toilet facilities are not adequate. In rural communities, some women and girls do not have the capacity to purchase sanitary towels, so they mostly rely on the use of reusable cloths and rags which has grave implications to  health.

Steffia and a School Girl in Delta State rural community

Research shows that over 800 million women and girls menstruate every day globally and they lack the tools needed  to properly manage their periods. There is a cultural and social stigma surrounding menstruation, often preventing women and girls from attending work and school. Even when they do attend while menstruating, the lack of access to menstrual hygiene products, lack of sanitation infrastructure such as private toilets and handwashing facilities, and lack of menstrual hygiene education can prevent women and girls from reaching their full potential in the classroom, in the workplace, and at home. 

In some societies, there is a norm that women should not talk about menstruation openly because it is something to be  ashamed of. This often leads to their discomfort during this period. There are  situations where men  have described menstruation, which is a natural phenomenon, as disgusting and shut down female folks who tried to speak openly about it.

A girl in a community in Lagos, laughing

WASH means Water, Sanitation and Hygiene while they are separate fields of work, they are interdependent. Without clean water, proper hygiene can not be practiced, without toilet facilities our water sources can be contaminated. Without access to WASH facilities, girls and women find it extremely difficult to manage their menstruation safely. Prioritizing WASH facilities has a direct link to improving  menstrual hygiene and can create opportunities for the integration of menstrual hygiene management into policies and programmes. A good example is seen in CODE’s work on Effective -Water Sanitation and Hygiene (EWASH) project which it is currently implementing with the support of the USAID in Nigeria. CODE has successfully advocated for the passage of WASH laws in Niger and Taraba states. These laws will ensure States prioritise the provision of clean and potable water for residents and increase the building of WASH facilities, which can improve menstrual health of women and girls. The lack of access to WASH facilities can affect the attainment of the Sustainable Development Goals (SDGs) like Goal 4.

May 28 of every year is set aside as Menstrual Hygiene Management Day (MHM Day), a day where Nonprofits, organized groups, private and government agencies come to celebrate the MH Day and advocate for good menstrual hygiene management. The theme for this year’s MHM helps to drive the narration IT’S TIME FOR ACTION with the hashtag #PeriodsInPandemic. Periods do not stop in a pandemic, so we can collectively as organizations, organized groups and individuals effectively advocate for the improvement of Menstrual hygiene management.

Managing Your Finances During the COVID19 Pandemic

Titus Tukurah May 25, 2020 78

Managing Your Finances During the COVID19 Pandemic

We are currently facing a pandemic that has not only impacted our lives, but also businesses, the economy, and the world at large. The Coronavirus pandemic has become a global issue with no prior warning as the entire world was caught unaware hence, the lack of proper planning for the impact.   This suddenness has taken a huge toll on our daily activities and lives in general. People reacted differently to the COVID- 19, especially because of the uncertainty as to when things will get back to normal, there is a range of emotions from fear, panic buying, job retrenchment, pay cut and other issues.

How can you manage your finances during a crisis like COVID- 19?

I have outlined a few ideas;

 Evaluate Your Financial Health: What you should do first,  is to analyze your assets and liabilities to ascertain your net worth. Net worth is basically really everything you own that is of significance (your assets) minus what you owe in debts (your liabilities), which can be positive or negative. Assets mean what you own that can enable economic benefit (Inflow) to flow to the entity/ person examples include Cash, buildings, land. Liabilities are what you owe on those assets — including car loans, your mortgage, and amounts payable.  

For you to effectively manage and monitor your finances then you need to create a monthly budget which is recommended or a weekly budget, whichever suits you). The budget will help track expenses and ensure that projected expenses are not above expected income. At this point, you should re-evaluate your budget tossing out unnecessary spending.

Understand the Differences between Wants and Needs: Before you spend, especially during an emergency of this type, in a pandemic, ensure that it is absolutely necessary. It is best to know what to prioritize,  such as your needs, and make sure to avoid the wants that are not necessary.  Basically your needs are essential to you and your wants are not to be prioritized at this phase. The 2 by 2 matrix below sheds more light on needs and wants.

Needs versus Wants Grid

Build your income streams by diversifying investments, this is not the time to sell off assets-avoid panic selling. Find profitable ventures while considering their risks and authenticity. The best form of investment is self-investment and also leverage on long and short investment options like cash and cash equivalents, money market, Eurobonds, mutual funds. We need investments so we can have a soft landing after the pandemic, to hedge against currency risk and to save for rainy days. 

Please hold cash, basic secondary economics classes taught us that people should hold cash for three (3) major reasons; Precautionary motive to meet uncertainties or emergencies, Speculative motive which I like to call exploring advantageous opportunities and when cash is held to meet day to day activity then it is called Transactional motive. In a nutshell, it is important to hold cash so as to cover unforeseen expenses, meet short term obligations, and take advantage of a juicy investment option.

We should all learn from experiences like this and plan adequately for unforeseen circumstances, whether you experienced a change in your finances or not, it is important to assess your financial resources and plan to ensure financial success. 

This is a phase that will pass. Change, they say, is constant, so this phase will pass. Stay safe.

The Federal Republic of Malabu

Communications May 24, 2020 0

The Federal Republic of Malabu

Charles E. Uche

Once Upon a Time… 

The scandal that surrounded the award of the OPL 245 to Malabu Oil & Gas Limited continues to have a negative impact on Nigeria 22 years after its occurrence. This outrageous breach of law and fiduciary duty has been brought to international limelight – before the comity of nations – where it has further marred Nigeria’s reputation as a nation where corruption is championed from the highest political offices. This has led to a financial downfall and a near unsalvable reputational disaster which affects Nigeria’s GDP and its ability to attract foreign direct/portfolio investment. The impact doesn’t just end there and like any other corrupt practice, it has a significant effect on the standard of living and welfare of the masses. Below is an abridged timeline of “events”:

1998: On April 24, 1998, an oil company by the name Malabu Oil and Gas Limited was incorporated. This company had no legitimate place of business; no employee nor asset.

Just 5 days later, on April 29th, this company was awarded a lucrative Oil Prospecting License ‘OPL 245’ – to one of the most lucrative oil fields in Niger Delta, estimated to have about nine billion barrels of crude oil, and worth about half a trillion dollars.

This grant of license was made without a bidding process; without a formal application process “stating willingness to comply with provisions and conditions that will be imposed, and giving information about the proposed methods of developing the block” pursuant to the Petroleum Act of 1969; and without the full payment of a signature bonus fee of $20 million to be made within 30 days of the grant.

How much was actually paid by Malabu?

$2 million (out of the required $20 million).

What is a Signature Bonus?

A signature bonus is a one-time fee for the assignment and securing of a license, paid irrespective of economic success for the contractor or licensee.

How was this Possible and who were the True/Beneficial Owners of this Faux Company?

Malabu Oil and Gas Limited was (caused to be) incorporated by Chief Dauzia ‘Dan’ Loya Etete “Dan Etete“, the then Minister of Petroleum Resources under the then Head of State, Gen. Sani Abacha, using a false identity so as to award himself (since he has the power to award licenses) and his cronies.

Etete’s Cronies: the owners of this faux company included; Mohammed Sani (alias for Mohammed Abacha, son of the then Head of State, General Sani Abacha); Kweku Amafegha (a fictional character created by Dan Etete, the then Minister of Petroleum Resources, responsible for the award of the license; and Wabi Hassan (wife of Hassan Adamu, a close friend of General Sani Abacha and one time Nigeria’s ambassador to the United States of America). Etete himself was neither listed as a director nor shareholder of the company. He, however, used nominees and had beneficial and ultimate ownership and control of the company.

Who is a Beneficial Owner?

  • A person who holds, directly or indirectly, more than 25% of the shares or voting rights in the company; or has the right to appoint or remove a majority of the company’s board of directors.
  • A person who takes all or most of the returns of a property’s equity or monetary gains.

2001: In 2001, Malabu conceded 40% participation interest to Shell on the agreement that Shell would pay the Federal Government the outstanding $18 million. That same year, Malabu’s license was revoked and was awarded to Shell after a bidding process.

2002: Subsequently, in 2002, Malabu petitioned the house of representatives which then conducted a public hearing into the transaction and concluded that the revocation of the block from Malabu and reallocation to Shell was done mala fide (in bad faith) and declared it null and void.

2003: The House of Representatives, therefore, passed a resolution in 2003 that the block should be returned to Malabu. The Federal Government did not comply with the resolution of the green chamber.

2006: Malabu went to court and there was a series of litigation between Malabu and the government until sometime in 2006 when they entered into an out-of-court settlement which was subsequently reduced to a consent judgment of the federal high court, Abuja. As a result of the agreement and all the conditions set out to be met by all parties, Edmund Daukoru, who was then the minister of state for petroleum resources, wrote on behalf of the federal government, and on behalf of Obasanjo to convey the decision to return the block 100% to Malabu in accordance with the terms of settlement.

It was part of the terms of settlement that Malabu would pay to the Federal Government within 12 months $210 million less the $2.04 million already paid. This was not done. Furthermore, the then Attorney General of the Federation, Bayo Ojo, was actively involved in the negotiations and settlement. It is alleged that the terms of settlement were reached by corrupt means.

2011: After series of negotiations between Shell/Eni and Etete through Emeka Obi, an investment  banker, the federal government revoked OPL 245 from Malabu, whose beneficial owner was Etete and Abacha and awarded it to Shell and Eni (Agip) consortium after a payment. Both companies purchased the rights to the OPL 245 for about $1.1 billion and the transfer was made “through” the Nigerian government to accounts controlled by a former Nigerian petroleum minister, Dan Etete. From accounts controlled by Mr Etete, about half the money ($520 million) went to accounts of companies controlled by Mr Aliyu Abubakar “AA Oil”.

Senior officers of both Shell and Eni were closely involved in these series of corrupt negotiations and sanctioned the acquisition of OPL 245 and the companies are indicted through the principle of vicarious liability as the senior officers were agents of their respective companies. Both companies also knew or ought to have known the fraudulent and corrupt nature and history of the grant of OPL 245.

Abubakar Aliyu and Emeka Obi, amongst others, are alleged to have acted as “middlemen” for top officials of former President Goodluck Jonathan’s administration and Etete in the scandal. Also, it appeared that the Federal Government of Nigeria, through the then Attorney General, Adoke, and Minister of Petroleum Resources, Deziani, facilitated the papers for the agreement and transfer of the said sum from the Shell/Eni to a Federation Account and finally to accounts controlled by Etete. 

2017: In March 2017, the Economic and Financial Crimes Commission, EFCC, filed fresh charges against Aliyu Abubakar, along with Mohammed Adoke, a former Attorney General and Minister of Justice, and Dan Etete, a former Minister of Petroleum, for involvement in the $1.1 billion Malabu oil scandal. They are being prosecuted alongside two international oil giants – Shell Nigeria Exploration Production Company, and ENI, as well as Malabu Oil & Gas Ltd, Rocky Top Resource Ltd, Imperial Union Ltd, Novel Properties & Dev. Co. Ltd, Group Construction Ltd, and Megatech Engineering Ltd.

2020: As of March, 2020, the Economic and Financial Crimes Commission [EFCC] were prosecuting 8 defendants in the Malabu case on 47 count charges bordering on fraud, bribery, abuse of office, money laundering, unlawful obtainment, and so forth. As of the last court hearing “arraignment” on March 4th, two of the defendants denied ownership of some companies also being prosecuted in the charge sheet. The matter was adjourned to March 17th and 18th pending confirmations from the Corporate Affairs Commission (CAC) before prosecution can begin their duties in earnest. This is 22 YEARS LATER!

The Malabu Scandal, alleged to be Africa’s most controversial and corrupt oil deals has indicted top Nigerian ex-officials such as; Former Attorney General of the Federation, Mohammed Adoke; Former Minister of Petroleum Resources, Alison Deziani, Dan Etete, and so forth, and has set off a series of multifaceted litigations and criminal prosecutions against the litany of local and foreign actors in several jurisdictions including Italy, France, Netherland, Switzerland, United States and Britain. Some of these foreign courts have also indicted Shell, Eni and convicted few Nigerian actors including Emeka Obi in Italy.

It is noteworthy that the entire transactions “Malabu deal(s)” emanating from the grant of OPL 245 was built on a shaky, fraudulent and illegal foundation and thus, neither Etete nor Malabu acquired legitimate rights to OPL 245, as it is a common legal principle that one cannot benefit from his own wrongdoing “Ex turpi causa non oritur actio“. 

In conclusion, the Malabu Scandal isn’t a Scandal. “Scandal” does not do justice to what transpired over 13 years, and managed to be lingering 22 years later without a single conviction of the perpetrators in Nigeria. What happened was a national sellout. Akin to how the Royal Niger Company sold the territories now Nigeria to Britain for £865,000. This time, it’s not the white man; it’s our leaders who hold their offices and manage our resources in trust for the Nigerian people.

Furthermore, it is my firm belief that the outrageous wrongdoings in the Malabu case are of a magnitude such that should stimulate the national consciousness and outcry of the Nigerian people, and actively mobilise them against corruption of any scale and kind. In addition, it is my firm belief that this consciousness and mobilisation, alongside the instrumental provisions of the Federal Audit Service Commission Bill and the Petroleum Industry Bill would strengthen the regulatory frameworks and institutions against corruption, bring Nigeria in tandem with global anti-corruption and extractive best practices, thereby deterring similar future occurrence. 

Other Salient Issues Connected to Malabu:

  • A President’s alleged ignorance of the overt acts of Senior Cabinet Officials of his administration – who represented the Federal Republic of Nigeria in the “Scandal”.
  • Lack of Public Beneficial Ownership Data/Register, especially with regards to Private ‘LTD’ Companies, as the provisions are directed to Public “PLC” Companies. Private Companies are not bound by Beneficial Ownership obligations of Sections 94-98 of the Companies and Allied Matters Act (CAMA). Guess what? Virtually all companies in the extractive sector today are Private LTD Companies. The NEITI Beneficial Ownership Register recently launched still has a long way to go to address this.
  • Excessive Powers of the Minister for Petroleum Resources. The current Petroleum Industry Bill that was refused assent by the President still gave enormous, discretionary powers to the Minister of Petroleum Resources. 
  • Arbitrary and Discretionary Grant of Licenses by the Minister of Petroleum Resources.
  • Weak Petroleum Regulatory Frameworks. Many of the laws around the Extractive Industry are very outdated. The Petroleum Act; NNPC Act, including the CAMA, to mention but a few, are antiquated; providing fines such as 25 to 2000 Naira.
  • Weak/Limited Audit Capabilities of the Office of the Auditor-General for the Federation. The Auditor General of the Federation has no special, comprehensive statutory, enabling enactment (besides Section 85 of the Constitution) that empowers him to audit statutory agencies, corporations, commissions and bodies. He also has no power to sanction MDAs who default in submitting their annual audit reports. However, while the current Federal Audit Service Commission Bill (which was also refused presidential assent) gives the office much of these audit powers, Section 85(3) of the constitution, including specific clauses of the Bill prohibits the office from conducting audit on statutory corporations, agencies, commissions and bodies. Perhaps, if the office had the required audit powers, the Malabu Scandal would have been detected a longer time ago.

Ultimately, Malabu Scandal is possibly one case out of a number; and if all the aforementioned issues are not adequately addressed, there might just yet be another massive, perhaps, worse Malabu in the Federal Republic of Malabu.

Charles E. Uche ESQ. is a Staff Attorney at Connected Development [CODE]. He holds a degree in Public and Private Law from Afe Babalola University, and the Nigerian Law School, Abuja.