Nigeria might lose $6bn due to corrupt oil deal

A court in Milan is considering charges of corruption against Eni and Shell in a controversial oil deal that led to Nigeria losing an estimated $6bn.

The campaign group Global Witness has calculated the OPL 245 deal in 2011 deprived Nigeria of double its annual education and healthcare budget.

Eni and Shell are accused of knowing the money they paid to Nigeria would be used for bribes.

The Italian and Anglo-Dutch energy giants deny any wrongdoing.

This unfolding scandal, which is being played out in an Italian court, has involved former MI6 officers, the FBI, a former President of Nigeria, as well as current and former senior executives at the two oil companies.

The former Nigerian oil minister, Dan Etete, was found guilty by a court in France of money laundering and it emerged he used illicit funds to buy a speed boat and a chateau. It is also claimed he had so much cash in $100 bills that it weighed five tonnes.

Global Witness has spent years investigating the deal which gave Shell and Eni the rights to explore OPL 245, an offshore oil field in the Niger Delta.

It has commissioned new analysis of the way the contract was altered in favour of the energy companies and concluded Nigeria's losses over the lifetime of the project could amount to $5.86bn, compared to terms in place before 2011.

The analysis was carried out by Resources for Development Consulting on behalf of Global Witness, as well as the NGOs HEDA, RE:Common and The Corner. The estimated losses were calculated using an oil price of $70 a barrel as a basis.

Eni has criticised the way it was calculated because it ignores the possibility that Nigeria had the right to revise the deal to claim a 50% share of the production revenues.

Deal or no deal

Campaigners say the deal should be cancelled.

"We discovered that Shell had constructed a deal that cut Nigeria out of their share of profit oil from the block," Ava Lee, a campaigner at Global Witness told the BBC's World Business Report.

"This amount of money would be enough to educate six million teachers in Nigeria. It really can't be underestimated just how big a deal this could be for a country that right now has the highest rates of extreme poverty in the world."

Nigeria is the richest economy in Africa, but despite having large resources of oil and gas millions of people are poor.

Lucrative OPL 245

It is understandable why Eni and Shell wanted to acquire the rights to develop OPL 245, because it is estimated to contain nine billion barrels of oil.

But the process of how they secured the contract is dogged by claims of corruption.

The court in Milan is weighing evidence of how a former Nigerian oil minister, Dan Etete, awarded ownership of OPL 245 to Malabu, a company he secretly controlled.

He is accused of paying bribes to others in the government, such as former President Goodluck Jonathan, to ensure that process went smoothly.

Shell and Eni are accused of knowing the $1.1bn they paid to Nigeria would be used for bribes, claims based on the content of emails which have since emerged.

"Looking at the emails it seems that Shell knew that the deal they were constructing was misleading but they went ahead with it anyway even though a number of Nigerian officials raised concerns about this scandalous, scandalous deal," says Ava Lee from Global Witness.

No wrongdoing

The Anglo-Dutch and Italian energy giants insist they have done nothing wrong, because they paid the money to secure the exploration rights directly to the Nigerian government.

Shell issued a statement to BBC World Business Report saying: "Since this matter is before the Tribunal of Milan it would not be appropriate for us to comment in detail. Issues that are under consideration as part of a trial process should be adjudicated in court and we do not wish to interfere with this process.

"We maintain that the settlement was a fully legal transaction and we believe the trial judges in Italy will conclude that there is no case against Shell or its former employees."

Eni has also denied any wrongdoing and told the BBC that it questions the competence of the experts commissioned by Global Witness and its "partners", as well as raising the possibility that the report by the campaign group is defamatory.

The Italian oil and gas company said "as this matter is currently before the Tribunal of Milan, we are unable to comment in detail".

In a statement it noted: "Global Witness together with its partners Corner House, HEDA Resource Centre and Re: Common had requested twice to be admitted as aggrieved parties in the Milan proceedings. On both occasions, the request was firmly denied by the Tribunal of Milan."

Eni also said it "continues to reject any allegation of impropriety or irregularity in connection with this transaction".

Biggest ever corruption case

Campaigners believe this is a landmark case and the outcome of the trial in Milan will cause an earthquake to reverberate through the oil and gas industry.

Nick Hildyard of the Corner House wonders if investors are comfortable. "Fund managers should be alarmed at this brazen dishonesty," he said.

Nigeria's leader is being encouraged to intervene by Olanrewaju Suraju, from HEDA. "President Buhari should reject any deal," he said.

The contrast between the way Italy deals with migrants and the actions of one of the nation's biggest companies has been raised by Antonio Tricarico of Re;Common.

"The Italian government is discouraging Nigerian migrants trying to reach Italy by claiming that it will help them at home, but Italy's biggest multi-national, part owned by the state, is accused of scamming billions from the Nigerian people."

The outcome of the unprecedented court case in Milan could force the oil industry to change how it conducts its business, especially in countries where corruption is rife, because more transparency about contracts and payments made would discourage fraud.

BBC

The despair of Nigeria's poor

Emita Dida, a widowed mother of six, has been living in "Monkey Village" for more than a decade.

She is one of thousands of Nigerians to be calling this informal settlement in Lagos' Ikeja neighbourhood home, sheltering in small shacks jammed together and constructed of rusted zinc.

"Life is difficult," says Dida, who runs a street-food stall.

After the death of her husband, Dida has been been finding hard to sustain her children on a meagre income. Unable to pay for their school fees, she relies on support from aid organisations to cover the cost of education.

"The little money I make is never enough," she says. "I have to feed my family from the food I sell, I can't afford to buy them other food."


Dida is among the millions of Nigerians struggling to make a living in the country's commercial capital - and beyond.

According to a report in June by the Brookings Institution, a Washington, DC-based think-tank, Nigeria has overtaken India as the world's poverty capital.

The study estimated that 87 million people in a country of nearly 200 million were living in extreme poverty, compared with 73 million people in India.

The report also projected an increase in extreme poverty in Nigeria - Africa's leading oil producer and most populous nation - until at least 2022.

Government officials have said the report does not reflect the true state of the country. Analysts, however, blame weak governance for the increasing poverty rate and say the heavy dependence on oil and gas is leaving the economy exposed to external risks while complicating development efforts.

"The Nigerian economy is an economy that depends on oil and earns what is called 'economic rent' - the income that comes from things that are not from our direct productive effort," says Professor Olufemi Saibu, an economist at the University of Lagos, urging the government to step up efforts to alleviate poverty.

Shrinking middle class

A crash in oil prices in 2014 hit Nigeria hard, sparking a financial and currency crisis and plunging the country's economy into recession two years later - the first in a quarter of a century.

Nigeria is now slowly exiting the downturn but growth remains sluggish, at about two percent, and inflation stubbornly high, an estimated 16.2 percent in 2017.

The unemployment rate, meanwhile, has soared in recent years, while the gap between the rich and the poor continues to widen.

"There is a high level of unemployment and less engagement of the people [in the job market]," says Saibu.

"And when people are not engaged, they earn so little which in turn makes them fall below the poverty line," he adds.

According to a 2018 African Development Bank report, "nearly 80 percent of Nigeria's 190 million people live on less than $2 a day".

February elections

With Nigeria now stepping up preparations to hold a crucial presidential election, scheduled to be held in February 2019, the issue of the economy is expected to dominate public debate in the months leading up to the vote.

The race will see a record 79 candidates vying for the country's top seat, with incumbent Muhammadu Buhari, former Vice President Atiku Abubakar and ex-World Bank Vice President Oby Ezekwesili seen as the main contenders.

"The most germane issue is the capacity of any candidate to ameliorate the economic situation," says Uche Ezechukwu, a Nigerian political analyst.

Another major concern for voters is corruption, an issue that has long plagued Nigeria due to public officials feasting on funds generated from crude oil exports.

Last year, Nigeria ranked 148th out of 180 countries on Transparency International's corruption index.

The country produces more than two million oil barrels per day and holds one of the world's largest gas reserves, but can barely produce electricity to power many of its households and factories.

The shortage is also pushing the price of goods up, as they are mostly produced by manufacturing firms running on costly diesel-powered generators.

"My salary is never enough for me," says Esan Monday, a 25 year-old who has lived in the "Monkey village" slum for 22 years.

He has no formal education and currently works in a bakery.

"I work so hard and am paid very little money, which I try to save up a bit to be able to buy some personal belongings," Monday told Al Jazeera.

After decades of high-level corruption and a lack of basic services, Monday says he expects little to change following the upcoming elections.

"The politicians have failed us," he says.

"I feel like all those elected into office only care about themselves. They only want our votes and don't provide us with the basic needs we demand for."

Al Jazeera

Video - TIZETI a solution for Nigeria's internet problem

Necessity, it's said, is the mother of invention. For tech entrepreneur Kendall Ananyi, this couldn't be more accurate. He and a friend set out to establish a video curating company, to become the Netflix of Nigeria. But they lacked fast and affordable Internet services to run their business. Realising the magnitude of the challenge, the two abandoned their initial plan and decided to solve the Internet problem instead.

50 staff members sacked at Nigeria High Commision in London

Over 50 Staff of the Nigerian High Commision London were dismissed and asked to accept a letter dated 22nd of November, 2018, Meanwhile, the Commission claims the dismissal took effect from 1st of January 2018.

The staff of the commission have been working all year (2018) with months of no pay. The letter of termination came due to continual outcry from staff members of the commission demanding their salary arrears.

In the letter signed by Helen Nzeako on behalf of the Nigerian High Commission UK, the termination of employment is as a result of restructuring of the organization and due to budgetary constraints. The staff members of the Commission have received this news in dismay and disappointment as most have served the Federal Government of Nigeria meritoriously. A source alleged that the exercise is a plot by the management to disengage every staff to so as to pave way for them to employ their friends & family members into these positions. The letter of termination or disengagement instructed staff to reapply for the same job if they so wish.

“We want the World to see how we are been ill-treated just because we asked for our salaries. This is so unfair and an injustice to democratic rule”. As quoted by a displaced staff of the commission. However the aggrieved staff are calling on President Muhammadu Buhari, the Federal Government of Nigeria to look into the matter.

Vanguard

Bring Back our Girls activist runs for top office and vows to disrupt 'Nigeria's politics of failure'

Bring Back our Girls activist and former Nigerian minister Oby Ezekwesili has thrown her hat into the election ring for Nigeria's upcoming 2019 elections and says her candidacy will "disrupt the politics of failure" in Africa's most populous nation.

Ezekwesili in an interview with Christiane Amanpour said bad governance had become endemic in Nigeria and citizens no longer hold leaders accountable for corruption or corrupt acts.
"It [Nigerian politics] produced dismal results such that today Nigeria is the world's capital of extreme poverty," she said.

"It's totally unacceptable. What I intend to do is to disrupt this and build a nation that is based on prosperity, stability, cohesion, and equality of opportunities for our people."

Around 87 million Nigerians are living in extreme poverty, according to the 2018 World Poverty Clock, despite the country's vast oil wealth and human capital.

Incumbent President Muhammadu Buhari, who is also running for a second term, vowed to tackle corruption in his first term, a promise many Nigerians say he has not fulfilled.

Ezekwesili, who announced she was running for Nigeria's top office in October, is towing the same path, with a campaign promise to weed out corruption, which she calls a "malignant and cancerous action."

"We know that corruption is a tax on the poor. And we already know there are ways to tackle corruption. You prevent opportunities for corruption; you reduce corruption.

"What my agenda is to deregulate the economy in the kind of way that public officials don't have too much presence in the economy to be able to utilize it for personal gain," she said in the interview.

Anti-corruption campaigner

Ezekwesili is one of the co-founders of Transparency International, a global watchdog fighting corruption. She has been nominated for the Nobel Peace Prize.

She leads the Bring Back Our Girls group calling for the safe return of kidnapped Nigerian schoolgirls kidnapped by terror group Boko Haram since 2014.

Ezekwesili faces an uphill task as a female presidential candidate, but most significantly, she will be running against incumbent President Buhari and Nigeria's former vice-president Atiku Abubakar in February next year. 

The activist said the candidates' popularity does not faze her and her ambitions to lead the West African nation. Ezekwesili believes she stands out from other candidates.  According to her, leadership is "gender neutral" and she brings "character, competence, and capacity" to the race, she said.  

"I am a better candidate than the men that are in this race, and even they will tell you that. I'm simply going to keep on with the issues that I want to solve and be a problem solver," Ezekwesili told CNN.

Her record of fighting corruption and plugging financial leaks in Nigeria's public sector, when she served as a minister proves she will deliver on her campaign promises, she said.

"I believe I am the candidate of the Nigerian people as I am not running alone. We are all running together. All of us that want a new direction for our country are running together," Ezekwesili said.
"This is a contest between the established class of politicians who have not delivered anything meaningful in governance and the rest of us. I'm simply a candidate who is providing a direction for the rest of society to take on these folks."

Ezekwesili served as Nigeria's minister of education in 2006 where she championed educational reforms to get more girls to attend school, especially in northern Nigeria.

CNN