Former chairman of the Economic and Financial Crimes Commission (EFCC), Abdulrasheed Bawa, says Nigeria lost $450 million to subsidy fraud under the Petroleum Support Fund (PSF) scheme between 2006 and 2012.
In his new book, ‘The Shadow of Loot & Losses: Uncovering Nigeria’s Petroleum Subsidy Fraud’, Bawa documents the massive fraud that marred the scheme.
Bawa was the chairman of the anti-graft agency from February 2021 to June 2023 and was a key investigator on the EFCC’s special team that probed the subsidy fraud.
In the book, Bawa stated that some of the indicted oil marketers were prosecuted and jailed, while 80 percent of the stolen money were recovered.
“Our investigations revealed that, as admitted by the oil marketing companies involved, fraud related to petroleum subsidies exceeded N68 billion, which translates to over $450 million in direct fraudulent activities. This fraud involved 59 out of the 141 companies that participated in the PSF scheme from 2006 to 2011. We also uncovered fraudulent claims amounting to N19.6 billion on issues related to traders (sellers), of which the oil marketing companies denied knowing anything about,” Bawa wrote.
“Our investigation further identified an attempted fraud of N9.4 billion wherein oil marketing companies forged documents to align with altered dates on the mother vessel bills of lading to secure higher subsidy payments. However, due to existing contingencies in the application of the guidelines, these altered bill of lading dates were ultimately not utilized.
“Interestingly, there were no recorded infractions in 2006 and 2007. However, by 2008, 2009, and 2010, we uncovered significant fraud totalling N11.5 billion, N4.88 billion, and N10.3 billion respectively. 2011 marked what I consider the peak period of petroleum subsidy fraud, during which we identified fraudulent activities amounting to N41.7 billion. In total, the fraudulent schemes accounted for approximately N68 billion, of which around 80% has been recovered. The unrecovered funds are associated with cases still pending in court or involve promoters who have since passed away.
“These direct losses in revenue, alongside many additional undisclosed amounts and indirect revenue losses, could have been used to finance essential public services, infrastructural development, and social welfare initiatives. Sadly, the fraudulent drain on public funds has exacerbated fiscal deficit, resulting in budget cuts in critical sectors such as education, healthcare, and social welfare programs.
“Table 6.1 presents the financial reports of subsidy payments under different administrations since Nigeria’s return to democracy in 1999. Over the last 25 years of democratic governance, Nigeria has expended a staggering N16.5 trillion on subsidies.”
He said further that a “substantial portion of the expenditure” was linked to false claims and theft from the national treasury.
