According to former EFCC Chairman Abdulrasheed Bawa, Nigeria lost $450 million as a result of fraud using the Petroleum Support Fund (PSF) between 2006 and 2012.
The revelation was reportedly made by Bawa in his recently published book, “The Shadow of Loot & Losses: Uncovering Nigeria’s Petroleum Subsidy Fraud,” which details the pervasive corruption that afflicted Nigeria’s gasoline subsidy system.
During his time at the commission, the former head of the EFCC, who oversaw a special investigation team, said that a number of oil marketers were found guilty and were later charged.
Nigeria has spent over ₦16.5 trillion on fuel subsidies since the return to democratic rule in 1999, according to Bawa, who also shed light on the country’s overall subsidy load.
According to the oil marketing companies involved, our investigations showed that fraud involving gasoline subsidies totaled more than N68 billion, or more over $450 million in direct fraudulent operations, he added. In this scam, 59 of the 141 businesses that took part in the PSF scheme between 2006 and 2011 were engaged. The oil marketing businesses denied any knowledge of the ₦19.6 billion in bogus claims we discovered on issues pertaining to traders (sellers), Bawa stated.
“In addition, our investigation found a N9.4 billion attempted fraud in which oil marketing organizations falsified paperwork to match the mother vessel bills of lading’s changed dates in order to obtain larger subsidy payments. Nevertheless, these modified bill of lading dates were ultimately not used because of preexisting complications in the execution of the standards.
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Remarkably, offenses were not reported in 2006 or 2007. We did discover substantial fraud, however, in 2008, 2009, and 2010, amounting to ₦11.5 billion, ₦4.88 billion, and ₦10.3 billion, respectively. I estimate 2011 to be the pinnacle year for petroleum subsidy fraud, with ₦41.7 billion in fraudulent activities discovered. About 80% of the approximately ₦68 billion that was lost to fraudulent schemes has been recovered. The money that hasn’t been retrieved is linked to cases that are still ongoing in court or promoters who lost their lives.
Essential public services, infrastructure development, and social welfare programs might have been funded with the help of these direct income losses as well as numerous more unreported sums and indirect revenue losses. Budget cuts in vital areas like social assistance, healthcare, and education have been forced as a result of the wasteful spending of public monies.
Subsidy payment financial records under several administrations since Nigeria’s restoration to democracy in 1999 are shown in Table 6.1. An astounding ₦16.5 trillion has been spent on subsidies by Nigeria in the last 25 years of democratic rule.
False claims and fraud from the public treasury were related to a “substantial portion of the expenditure,” Bawa continued.
