Femi Gbajabiamila is deeply troubled by Nigeria’s oil theft calamity. The speaker of the House of Representatives recently equated the danger of oil theft to that of treason. The speaker relatively trivialised the crisis.
Many see treason as a crime against a sitting government. Those in this school of thought contend that if an honest-hearted plotter removes a corrupt government and leads the country in the right direction, he obviously would have averted disaster for the entire country.
Conversely, oil thieves have no plan to lead Nigeria out of trouble. They are happy with the cluelessness in the system because it allows them to satisfy their selfish interest of enriching themselves at the expense of 216 million people. For a one-handed economy like Nigeria’s, oil theft is more dangerous than treason.
August was a catastrophic month for Nigeria’s imperiled revenue. The oil wells were producing at full blast but the oil was just not getting to the export terminals. Nigeria produced less than one million barrels per day during the catastrophic month.
Ironically, Nigerian Navy has a different picture of oil theft from the one painted by the federal government. The federal government argues that about 400, 000 barrels of crude oil is stolen daily.
The navy’s position is that those who hold that view are combining the relatively low oil theft with what is lost to the oil industry’s alarming inefficiency that inhibits operations that would enable Nigeria to meet its daily oil production target. The navy believes that daily crude oil theft is less than 100, 000 barrels.
Ironically, even if we were to accept the navy’s argument, that figure makes Nigeria the most scandalous country in the global oil industry. It implicitly indicts the navy’s ability to secure Nigeria’s territorial waters. Even without the oil industry’s inefficiency, Nigeria remains the country with the highest oil theft in the world.
Mexico is a distant second with a paltry 10, 000 barrels of oil theft per day. The country has drastically reduced the crime. Nigeria has no plan to combat oil theft. The situation is worsening by the day with the navy complaining in utter helplessness.
Gbajabiamila wants the federal government to regard oil theft as treason and treat suspects as such. The federal government probably sees the Gbajabiamila solution as killing a fly with a sledge hammer. Unfortunately, it is not doing anything.
Oil theft in Nigeria is too glaring and catastrophic to the economy for anyone in government to claim ignorance. Two weeks ago, a leading news agency in the European Union (EU) called to express interest in my column on August 20, 2022 captioned “Nigerian Navy, MV Heroic Idun and oil theft”. The agency asked me probing questions about oil theft in Nigeria.
Confirming the position of the navy on MV Heroic Idun, the agency contended that they have been tracking the rogue giant marine tanker vessel and that it actually did not pick any oil from Nigerian shores as the navy interference disrupted its plans.
The agency, however, drew my attention to what it calls “Togo Triangle” and contended that oil stolen from Nigerian fields are sold to international crooks at “Togo Triangle”.
I was also told how Nigerian oil thieves advertise their wares in Facebook, and that the agency just read a posting by someone who said he had a barge of crude oil for sale and enjoined buyers to contact him.
That is how bad the situation is. If the federal government does not know those who advertise stolen crude oil in Facebook and how it is sold at “Togo Triangle, then Nigeria is just a sitting duck in a hostile world.
With revenue plummeting precipitously due to oil theft, the danger of treason has paled into insignificance. Conversely, oil theft directly affects the 216 million people in the geographical contrivance known as Nigeria.
Oil theft is primarily responsible for the disorderly retreat of the naira in the foreign exchange market. Everyone in Nigeria is paying the price of the depreciation of the naira because as an import-dependent economy, the exchange rate of the naira determines the direction of inflation in the economy.
Everything from farm produce to imported goods carry outrageous prices because the purchasing power of the naira is rapidly dropping below the value of the paper on which it is printed.
We are gradually heading in the direction of the German economy in 1925. After Germany’s defeat in the First World War, the victorious nations imposed outrageous reparations on Germany that brought the economy to its knees.
At a certain point, the purchasing power of the German mark was so low that if someone loads it in a sack and keeps it by the road side, a thief would empty the money on the ground and steal the sack. With uninhibited oil theft, the naira is heading in that direction.
Gbajabiamila is not alone in his fears. Many are thinking aloud that the federal government should find out the trick behind Sani Abacha’s relative success in economic management during his tumultuous five years in power.
The strange thing about Abacha’s reign is that he sold oil at $10 per barrel, stole something close to $7 billion and managed to sustain the naira at an exchange rate of N80 to the dollar throughout his tyrannical reign. Someone in the federal government has to find out the trick behind that success.
Today, we are selling Bonny Light crude oil at $110 per barrel. The federal government has the fight against corruption as one of its cardinal points, yet the naira trades at N714 to the dollar.
The argument is that corruption was highly centralised under Abacha thus reducing the looting spree. Corruption is completely decentralised under the current administration. Looting is free for all. That probably explains why government feigns ignorance of developments at “Togo Triangle”. It also explains why thieves freely advertise stolen oil in Facebook.