How Tinubu Faces Legal Trouble Over Disappeared Subsidy Money of $2.1 Billion, N3.1 Trillion

Patrick OdeyJune 11, 2023

4 minutes read

President Bola Tinubu, who was sworn in as Nigeria’s leader on May 29, 2023, is facing a lawsuit over his alleged failure to investigate the disappearance of billions of dollars and naira in public funds meant for fuel subsidy payments between 2016 and 2019.

The lawsuit was filed by Socio-Economic Rights and Accountability Project (SERAP), a civil society organization that advocates for transparency and accountability in the management of Nigeria’s natural resources.

SERAP is seeking an order of mandamus from the Federal High Court in Lagos to compel President Tinubu to direct anti-corruption agencies to promptly investigate the allegations of missing funds, name and shame the suspected perpetrators, and recover any proceeds of crime.

SERAP also wants President Tinubu to use any recovered funds as palliatives to address the impact of the subsidy removal on poor Nigerians, and to put in place mechanisms for transparency and accountability in the oil sector.

According to SERAP, the allegations of missing funds amount to a fundamental breach of national anti-corruption laws and Nigeria’s international obligations under the UN Convention against Corruption, to which Nigeria is a state party.

SERAP argues that President Tinubu has constitutional and international legal obligations to get to the bottom of these allegations and ensure accountability for these serious crimes against the Nigerian people.

SERAP claims that directing and compelling President Tinubu to promptly probe, name and shame, and bring to justice the perpetrators and recover any missing public funds would advance the right of Nigerians to restitution, compensation, and guarantee of non-repetition2

SERAP cites several audited reports by the Auditor General of the Federation (AGF) between 2016 and 2019 that indicate that the Nigerian National Petroleum Corporation (NNPC) failed to remit N663.9 billion, N1.96 trillion, N55.2 billion, and N4.6 billion into the Federation Account from various sources of revenue.

The AGF also reported that the NNPC failed to account for the allocation of crude oil to refineries in 2019, amounting to 107.2 million barrels valued at N55.9 billion, which may have been diverted.

The AGF further reported that the NNPC illegally classified 239,800 barrels of crude oil valued at N5.5 billion as crude oil losses, and failed to account for 22,929.84 litres of PMS pumped from refineries valued at N7.1 billion.

The Department of Petroleum Resources (DPR) was also accused by the AGF of failing to remit US$1.28 billion in revenue to the Federation Account in 2019.

“The Department of Petroleum Resources (DPR) in 2019 also reportedly failed to remit US$1,278,364,595.49 in revenue to the Federation Account. The money was deducted by the NNPC from the Oil and Gas Royalty assessed by the DPR.

“The DPR in 2019 also deducted N19,840,081.29 as ‘stamp duty’ payments from contractors and consultants but the DPR instantly paid back the money to the contractors and consultants instead of remitting it to the treasury.

“The DPR in 2019 also paid N137,225,973.35 to contractors and consultants for various contracts and consultancies but failed to deduct stamp duty.

“The DPR also paid N11,856,088,271.92 as salaries for 2019 but failed to deduct N118,560,882.72 as the contribution of 1% Industrial Training Fund (ITF). The DPR in 2019 also failed to transfer US$35,738,342.95 year balance.

“The DPR in 2018 also withdrew without any explanation US$759,387,755.10 from DPR Signature Bonus Account rather than paid the money into the Federation Account.

“Subsidy records show that N443,940,559,974.80 was paid as total subsidy for 2016 but the money was not budgeted for. The payments were for outstanding Petroleum Support Fund (PSF) commitments for the year 2015. However, there was no payment in 2016. Only outstanding payments for previous years 2014 and 2015 and interest payments were made in 2016.

“The Auditor-General fears that the oil marketers that received the subsidy payments may not have been ‘eligible to draw from the Petroleum Support Fund as the Petroleum Products Pricing and Regulatory Authority (PPPRA) failed to provide any document on the payments.

“N39,141,210,181.74 was also paid from the Federation Account in 2016 to different Oil Marketers in 26 transactions, being Payments of Interest and Foreign Exchange Differential on Subsidy but without any document.

“The NNPC also made ‘zero profit’ and recorded ‘losses from its joint ventures in 2016. This is contrary to expectations that profits should be made from the joint ventures.

“The Ministry of Petroleum Resources, Abuja in 2016 paid N14,490,000.00 for the supply of 3 Nissan Almera Saloon vehicles 1.5 to the Ministry without proper documentation. The purchase of ‘the vehicles were made through direct procurement without competitive bidding by at least three companies, as required by Financial Regulations. There was no advertisement and bidding for this contract.

“Although ‘N12,442,500.00 was approved by the Bureau of Public Procurement for the vehicles, the Ministry made an overpayment of N2,047,500.00 to the car company.’”

President Tinubu has not yet responded to the lawsuit or the allegations of missing funds.

President Tinubu, who is a former governor of Lagos State and a former senator for Lagos West under the Social Democratic Party (SDP), was elected president in 2023 as a member of the All Progressives Congress (APC), a coalition of opposition parties that formed in 2013

He is widely regarded as one of Nigeria’s most influential politicians and a key player in the country’s democratic transition since the end of military rule in 1999.

He is also known for his achievements in urban development, infrastructure, education, health, and security while he was governor of Lagos State from 1999 to 2007.

However, he has also faced criticism for his alleged involvement in corruption scandals, human rights violations, political violence, and nepotism.

He has denied any wrongdoing and has challenged his detractors to provide evidence of his alleged crimes.

President Tinubu has promised to tackle Nigeria’s myriad challenges such as poverty, unemployment, insecurity, corruption, and poor governance during his tenure as president.

He has also pledged to diversify Nigeria’s economy away from its dependence on oil revenues and to implement reforms in key sectors such as power, agriculture, health, education, and transportation.

He has also vowed to respect human rights, uphold the rule of law, strengthen democratic institutions, and foster national unity and cohesion.

However, many Nigerians are skeptical of his ability to deliver on his promises, given the country’s history of unfulfilled expectations, broken promises, and dashed hopes.

Some Nigerians are also concerned about his age, health, and political agenda, as he is 71 years old and has been accused of having a hidden ambition to extend his stay in power beyond his constitutional term limit.

As President Tinubu takes office amid hopes and fears, he faces a daunting task of proving himself as a leader who can transform Nigeria for the better and restore the trust and confidence of the people in their government.