CITIZENS’ APATHY AND THE NEED TO REBUILD TRUST, CODE SEEKS TO MAKE A DIFFERENCE
Lack of transparency, poor social accountability, information gap, weak social contracts; illiteracy; citizenry apathy and distrust in government, are entrenched governance challenges in Nigeria
Connected Development (CODE) seeks to address these misnomers by amplifying voices of marginalised grassroots communities that are often denied access to basic human needs despite that funds are allocated for the implementation of development projects in these regions.
CODE is bridging the information gap between citizens and the government, tackling financial leakages and bringing governance closer to the people at the grassroots. We do this by empowering citizens with the knowledge, skills and capacity to demand for the provision of quality public services in their communities.
Consequently, essential development projects, previously abandoned or which otherwise would not have been implemented, are being restarted and completed, accelerating social development in these regions, fighting inequality and promoting inclusive development.
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Understanding that citizens apathy was increasing and government continued to fall short of expectations, CODE’s overall 2019 objective was to make a significant difference in increasing citizens and government’s consciousness towards rebuilding trust.
Our 2019 campaigns enabled platforms for informed debate between public institutions and citizens and also advocated for more government agencies to leverage digital communications to foster trust, increase transparency and ensure better accountability.
CODE’s Chief Executive, Hamzat Lawal
Over the past seven years, CODE has showcased consistency and doggedness in amplifying the voices of the marginalized. In 2019 specifically, our team deployed innovative strategies and global best practices in empowering citizens, especially the grassroots dwellers to demand for improved services in healthcare, water, education and development infrastructures. On the other hand, we petitioned government to provide these services so that citizens faith in governance can be regained. Our advocacy influenced government policies for the acceleration of socio-economic development.
CODE tracked NGN 1,277,500,000 (USD 3.5 million) budgeted for projects in 69 grassroots communities—calling for improved first-mile health infrastructure and services, demanding that a state of emergency be declared on education because of the alarming increase in the number of out-of-school children and campaigning for communities to access safe clean water, we impacted over 2 million lives.
We further saved the Nigerian people and the government the sum of N477 million by blocking financial leakages in funded rural community projects. Our work gained global recognition when Follow The Money emerged winner of the 2019 United Nations Sustainable Development Goals Mobilizer Award and also won the Council of Europe’s Democracy Innovation Award as the initiative advancing the cause of democracy.
CODE’s Communications Director, Kevwe Oghide
CODE further petitioned anti-graft agencies to investigate oil industries that abuse human rights, partake in illicit financial flows and exploit the fragility of oil producing communities in Nigeria. Our team further engaged policy makers, stakeholders and beneficiaries, on effecting policies that promote gender inclusion in Community Development Councils.
Key reoccurring challenges that our team continue to face are; threats for exposing misappropriation of funds, poor access to data to enable tracking of government funds, security issues in North-East of Nigeria, and limited funds in reaching more grassroots communities.
We, however remain dogged in promoting a sustainable FTM model to ensure that true democracy is achieved—where citizens are empowered in every sense and their collective voices are heard. In hindsight, it can be said that CODE experienced yet another year of growth and influence.
With incredible support from the CODE team, our State champions, our partners and donors, we will continue to innovate better ways to hold government accountable and advocate best policies in favour of marginalised communities. With each effort, we get closer to our goal of empowering Africa, one community at a time.
Follow The Money Tracks N569 Million UBE Spending in Kaduna State, Enhances State Policy for Participatory Basic Education
Follow The Money, has completed the tracking of the implementation of N569 million Naira Universal Basic Education fund in Kaduna State over the course of three years.
The campaign which was supported by the John D and Catherine T. MacArthur Foundation under its ON-Nigeria project, monitored the construction and rehabilitation of 23 basic school projects in Kudan, Kajuru, Zangon Kataf and Jema’a Local Government Areas (LGA) of the State. The project was triggered by the growing concern of the increasing number of out-of-school children in the country.
At a meeting with the Chairman of the State’s Universal Basic Education Board, Follow The Money Founder, Hamzat Lawal, commended the State for its open government policy and for allocating 27% of its budget to developing education. He noted that as a way of increasing citizens’ interest in government, the FTM team drafted a policy for participatory basic education spending in the state which mainstreams SBMCs in Kad-SUBEB’s UBE work planning and implementation.
The Executive Chairman, KadSUBEB, Mr Tijjani Abdullahi, revealed that the State Universal Basic Education Board (Kad-SUBEB) will develop a framework that allows the School Based Management Committees (SBMCs) to make inputs into the Kad-SUBEB’s annual plans and grant them access to the list of school projects that are to be implemented for monitoring effective service delivery.
He added that although about 500,000 children returned to school pre-COVID19, there is the need to build more Classrooms for the students, as measures to enforce social distancing in the classroom, during the pandemic.
Recall CODE had met with the Deputy Governor of Kaduna State, Dr Hadiza Balarabe, last year to present a needs assessment report conducted on 609 schools for evidence-based UBE action planning in the State. The report showed that a considerable increase in the enrolment of children in schools was as a result of the School Feeding Programme, however, 92 percent of the schools do not have access to ICT materials or computers in accordance with basic education curriculum.
The initiative urged the State to provide ICT materials and computers to schools, provide potable drinking water for the majority of schools that lack these facilities, and ultimately ensure that adequate WASH facilities are in school to encourage girl-child educational enrolment. Dr Balarabe had assured that the State is committed to strengthening its workforce and welcome the support CODE to make it happen.
Follow The Money further empowered the School Monitoring Teams (SMTs) to effectively provide oversight on basic education spending in the state. Through this, the project impacted over 200,000 rural lives, and significantly reduced the number of out-of-school children in the focal LGAs.
The project titled Tracking UBE Spending in Kaduna State, sought to identify and highlight key issues of lack across schools in the LGAs especially in the areas of water, sanitation and hygiene, infrastructure and learning aids, ratio of teachers to pupils and the safety of the learning spaces for the children.
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 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.
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.
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.
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, Moderator’s 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
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.
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.
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.
The COVID-19 pandemic has posed a serious challenge to the world, necessitating countries around the world to adopt stringent measures such as complete or partial lockdowns in order to contain the spread of the disease and this has had adverse implications on national economies and rural livelihoods. The Federal Government of Nigeria (FGN) had to close its land, sea and air borders and implemented a total lockdown in states and cities with very high infection rates across the country.
Consequently, state governments have followed suit. These measures have had its toll on individuals, households, micro, small and medium scale enterprises (MSMEs) and large corporations. In order to cushion the effect of the pandemic on the citizens, the federal government had announced a number of responses: N500 billion COVID-19 Crisis Intervention Fund, 50 billion Naira CBN intervention fund for households and MSMEs, 20,000 Naira four months conditional cash transfer to the country’s poorest, reduction in price of fertilizers as subsidy to farmers etc.
A trader at the Mile 12 Market in Lagos.
Approvals have been granted by the National Assembly and the International Monetary Fund for Nigerian government to borrow 850 billion naira domestically and $3.4 billion respectively to help finance the 2020 budget and reduce the impact of the severe economic shock the COVID-19 pandemic is having on the Nigerian economy. Experts believe the palliative measures introduced so far by the government are not enough considering Nigeria’s estimated 200 million population. The continuous decline in oil prices which is Nigeria’s major foreign exchange earner and the subsequent dwindling of the country’s foreign exchange reserve has put the country in a very difficult economic position at this time.
It is important for the government to diversify its MSME sector to develop in all areas of agriculture, manufacturing, entertainment, technology and services as each of these sectors will continue to be very relevant to the overall GDP growth as well as employment generation in the country post COVID-19.
The budget should be revised downwards basing the revenue benchmarks and assumptions on realizable thresholds and estimates to ensure optimum budget performance. Government must at this time cut the cost of governance, reduce unnecessary expenditures and channel available resources into empowering MSMEs and stimulating the economy. Efforts should be made to limit importation and to encourage local manufacturing of most of the medical supplies such as facemasks, hand sanitizers, ventilators etc as to conserve our forex. The cash transfer palliative to the country’s poorest should be inclusive and there should be transparent, comprehensive and universal social protection systems to mitigate against the prevalence of poverty.
This report analyses the implication of Nigeria’s level of preparedness to combat COVID19 on its economy; the impact of the extremely decline in oil prices, and the influence on Medium and Small Enterprises in the coming months.
