A recent United Nations (UN) report on oil-related crimes revealed that Nigeria lost an estimated $2.8bn or N1.1trillion in revenue in 2018. The report commissioned by the Secretary-General of the UN, Antonio Guterres, on the activities of the United Nations Office for West Africa and the Sahel (UNOWAS), indicated that crude oil thefts and other related crimes, threaten government’s revenues, peace and security in the country.
According to the report, which covered the period between July and December, 2018, maritime crime and piracy, off the coast of West Africa, posed a formidable obstacle to peace and security in the region. The report also noted that between January and November, 2018, there were 82 reported incidents of maritime crime and piracy in the Gulf of Guinea.
There was more drug-trafficking throughout West Africa and the Sahel in 2018 than in 2017. Previous reports said Nigeria was the transit route of such illicit trade that denied government much revenue. Other West African countries where oil-related crimes thrive include Benin Republic and The Gambia. The Federal Government should treat the UN report with all seriousness. It will be recalled that a similar report, two years ago, by the Nigeria Natural Resource Charter (NNRC) on crude oil theft revealed that government lost over N2.6 trillion between 2016 and 2017. The NNRC is a UK-based Non-Governmental Organisation that provides policy options to guide governments and societies in general on how to manage their natural resources for development. Like the UN report, the NNRC report harped on the difficult and formidable obstacles posed by oil theft and other related crimes.
According to the report, oil theft and related crimes assumed a disturbing dimension, costing the Nigerian economy huge losses, sometimes bigger than 2018 Federal allocations for education and health sectors combined. Poverty, unemployment, poor governance, pervasive corruption, pipeline vandalism, sabotage and the neglect of the oil-bearing Niger Delta region, were cited as factors responsible for oil- related crimes in Nigeria. The UN and NNRC reports also alleged that security officials were complicit in the crimes. The NNRC report specifically accused security officials deployed to curb oil theft and related crimes of collecting bribes. The amount lost to oil thieves in 2016 was close to the revenue realised by the Federal Inland Revenue Service (FIRS) in that financial year.
Considering the perennial loss in revenue due to oil-related crimes, government should design new strategy to curb the menace, as both local and foreign reports show that such illegal activities are deleterious to our economy, particularly now that government’s projected revenues have dipped significantly in recent years. For instance, a recent report by Chatham House, claimed that Nigeria loses a massive $1.5billion monthly to pirates. The amount is about the daily export capacity of the Forcados oil terminal. The huge loss in revenue can no longer be condoned now that it has been officially confirmed that the economy is in “bad shape”. Moreover, the Federal Allocations to states have also declined due to volatility in the price of crude oil.
A report by Shell Petroleum Development Company also revealed that crude oil theft increased to 50 per cent in 2017. In addition, the NNPC monthly financial operational report for November 2016, showed that out of its total earnings from domestic crude oil and gas sales, N11.78billion was spent on pipeline repairs and management compared to N12.34billion in October 2017. However, it lost N127billion to crude oil theft and other infractions in 2016. The figures may have increased since then.
Therefore, we call for a proactive approach to combat oil-related crimes. We hope that the establishment of security and regional development committees as well as the Community Pipeline and Facilities Surveillance Programme will assist in combating oil theft and pipeline vandalism. It has also become imperative to enact a law that will prescribe stiffer jail terms for oil-related crimes. Oil firms should also improve their relations with host communities and use the local communities for effective intelligence gathering on crude oil theft and other related maritime crimes.