Austerity Is Only Needed Because Of Organised Looting


by Drew Povey

The new Federal and state governments may try and extend the current austerity measures – their excuse could be that the international price of oil has reduced.  However, oil revenue should still provide the funds needed to provide much better public services.  It is really only organised looting by the corrupt elite that has meant that the government suffers any shortage of funds.

With the increases in the price of oil, the government’s oil revenue grew steeply from N724bn in 1999 to N4,400bn in 2007 and again to N8,800bn in 2011.  However, in 2012 UNDP said that less than a 2% of the Federal budget was spent on health and over a third of adults were illiterate.  In contrast, there are over 150 private jets in Nigeria.

One of the main reasons for this is the level of looting of oil and associated funds.  In the first quarter of 2013, according to the NNPC, the government lost nearly N200 billion to oil thieves and vandals.  The International Energy Authority puts the level of crude oil theft at around N140 billion. The IEA estimates that oil theft may be 150,000 barrels a day or 14% of production (others say that up to a quarter of Nigerian oil exports are lost in this way).  The value of this oil is equivalent to the current level of spending on education and health combined – so without oil bunkering, spending by the government on education and health could be doubled.  Alternatively, the International Energy Agency says this revenue could be used to provide universal access to electricity by 2030.

A former leader of the National Union of Petroleum and Natural Gas Workers (NUPENG), Peter Akpatason, says that:

Crude oil theft is not possible without the connivance of the security agencies, because petroleum tanker or vessels [are] not small objects, [they] are large enough for anybody to see them from anywhere.  Barges and ships are not small, and they are the instruments they use in carting the oil away.  The security agencies were given uniforms and arms to protect Nigerian interests, but they are using it to protect criminal syndicates against the Nigerian people.

The law stipulates life imprisonment for anyone stealing crude oil or vandalising the pipelines.  But no-one has yet been charged, prosecuted and jailed by any of the prosecuting agencies.

The former Governor of the Central Bank, Lamido Sanusi, also claimed that $20billion in oil revenue had not been properly accounted for by the NNPC over the previous 19 months.  In defence of the government, the Finance Minister, Ngozi Okonjo-Iweala, claimed it was only $12billion!  This is the equivalent to about half the Federal Governments estimated revenue for last year.  In addition, during 2013, the oil subsidy fraud by oil sector operatives and marketers led to a loss of nearly a further N400 billion.

Other vast sums are also lost through government contracts and revenue collection.  Corruption on this level is not just theft, but organised looting of our money.  Corruption is the main way that the government rewards its major friends and supporters.  It is not thieves who are taking this money, but the government is just giving it away.

Governments do nothing to reduce the level of corruption – why would they want to make their own policies and actions more difficult.  The anti-corruption bodies like the Economic & Financial Crimes Commission (EFCC) and Independent Corrupt Practices Commission (ICPC) are just used to attack the government’s enemies.

Much of this stolen money will have probably disappeared during the elections when vast sums were used to try and ensure another four years of looting of the public treasury.  The results of the election will not result in a major change.

Buhari claimed that he would lead an effective fight against corruption. But he will be under great pressure to distribute huge sums to reward his supporters and allies.  The political support of people like Tinubu does not come cheap.  The faces of those receiving corrupt funds may change, but the sums involved will change little.  Unless we can also put pressure on the government to really fight against corrption.

We need to ensure the NLC and TUC organise a militant fight against austerity.  Austerity is only necessary because of organised looting or our resources by the rich and corrupt elite.



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