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Business and EconomyFuel subsidy debacle and the $3m Farouk-gate scandal

Fuel subsidy debacle and the $3m Farouk-gate scandal

OrderPaperToday – Will fuel subsidy be removed in 2022? This is the million dollar question causing, by far, the biggest anxiety and apprehension among Nigerians as the curtain draws on 2021 and the new year approaches.

A recent pronouncement by the Group Managing Director (GMD) of the Nigeria National Petroleum Corporation (NNPC) Ltd that fuel subsidy will be removed in 2022 has been corroborated by announcement by the Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, that plans have been made to pay N5000 (five thousand naira) monthly to 40 million vulnerable Nigerians to cushion the effects of the removal. This development has thrown the polity into a heated debate on whether or not fuel subsidy should be removed.

How Lawan loomed large…

However, the debate needs to take cognizance of the $3m Farouk-gate scandal which rocked the National Assembly in 2012 and eventually came to a judicial determination earlier in the year. Recall that former member of the House of Representatives, Mr. Farouk Lawan, was handed a jail sentence of seven (7) years for collecting bribe in the course of investigating the fuel subsidy scheme. The foxy Farouk Lawan, who chaired the House of Representatives adhoc committee on fuel subsidy, was convicted of the charge of collecting $500,000 bribe from oil magnate, Femi Otedola. Mr. Lawan was a member of Peoples Democratic Party (PDP) and he represented Bagwai/Shanono federal constituency for four tenures back-to-back. He was first elected in 1999, and reelected subsequently in 2003, 2007 and in 2011. He chaired juicy committees of the House Committee at various times, including finance and education. He was also a political playmaker in parliament and was quite influential in the series of leadership tussles which played out in those assemblies. For instance, he led the Integrity Group, an alliance of House members opposed to then embattled speaker, Patricia Etteh, who was eventually forced out of her exalted seat in 2007. But it was only a matter of time before Lawan’s integrity would unravel.

The 2012 fuel subsidy scandal…

In January 2012, the nation was thrown into a social unrest following the abrupt removal of fuel subsidy by the administration of then President Goodluck Jonathan. The House of Representatives responded swiftly by cutting short its recess and dramatically convened an emergency plenary session on a Sunday – the first (and last so far) in the history of the country. A key resolution from that sitting was that the House should probe the fuel subsidy scheme. And Lawan was called upon to take on the arduous task by leading the adhoc committee empanelled for the historic probe. The Committee’s work revealed to a bewildered nation that the fuel subsidy regime involved a huge scam in which companies were being paid hundreds of millions of dollars by the government for fuel that was never delivered. But another damning revelation would surface to further bewilder a beleagued nation – leaked tapes of Lawan negotiating bribes with Otedola and seen sticking wads of US dollars into his oversized cap.

The lawmaker was alleged to have collected $500,000 from Mr. Otedola, as part of a $3 million bribe he had demanded in order to give his company, Zenon, a soft landing. While Otedola appeared to have had Lawan set up and nailed, the diminutive Kano rep countered that accepted the money in order to expose blackmail and informed the committee and Economic and Financial Crimes Commission (EFCC) about it. At the end of the day, Lawan and the House of Representatives were left with a badly bruised image; Otedola was perceived as a crime buster; while Nigerians were left with a drama filled with sound and fury with nothing to show for it apart from entertainment. This was how the National Assembly missed the historic moment to unravel the murky waters of fuel subsidy and probably bring about reforms.

The verdict and sentencing…

But while Nigeria missed the chance to tame the subsidy bogey, the law followed up on Lawan. He was put on trial alongside the clerk of the committee at the time. Matters came to a head on 22nd June, 2021 after a long trial when Justice Angela Otaluka, found him guilty and committed Lawan to seven (7) years in prison. In her judgment, Justice Otaluka relied heavily on the testimony of Otedola, who described giving the $500,000 to Mr. Lawan in a famed sting operation said to have been planned with the State Security Service (SSS) to obtain evidence. “Count One of the charges is not based on suspicion but on credible evidence. The defendant (Mr. Lawan) corruptly asked for $3million and received a $500,000 bribe in two tranches from Femi Otedola,” the judge said.

Will fuel subsidy removal happen this time around?

While Mr. Lawan may have been put where he belongs as far as causes and consequences are concerned, can Nigerians say same thing of fuel subsidy? Fuel subsidy is traceable to the 1970s when it was then introduced as a response to the oil price shocks of that era. Although, despite several attempts, Nigeria has never successfully removed fuel subsidies, largely due to lack of political will and of course stiff popular opposition. Currently, Nigeria reportedly spends N2.93 trillion annually on fuel subsidies which according to government is not sustainable. So will the government succeed in removing fuel subsidy in 2022?

Lizzy Chirkpi
Lizzy Chirkpi
Lizzy Chirkpi has a BA in French and is a senior reporter at OrderPaper. She has keen interest in photojournalism and video documentary. She's also a writer and author of a book, "Pourquoi Le Francais." She likes reading, traveling and watching movies.
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