Shell’s role in a $1.1bn corruption scandal in Nigeria poses significant hidden risks for investors, the international non-governmental organisation, Global Witness, said at the company’s 2015 Annual General Meeting.

The warning comes as the oil major is lobbying the United Kingdom and United States authorities to undermine the implementation of new transparency laws, which will consign such secretive deals to history.

The corruption at the heart of the deal deprived the Nigerian state of over $1.1bn, triggered investigations by authorities in three countries and can potentially lead to Shell and its Italian partner, Eni, losing access to the oil block.

Global Witness, in a statement on Tuesday, noted that in 2011, Eni and Shell paid $1.1bn for Oil Prospecting Licence 245, one of the largest off the coast of Nigeria.

“The money should have ended up in state coffers, where it is badly needed – the amount in question is equivalent to two thirds of the Nigerian health care budget,” the NGO said.

Instead, the payment was made by Shell and Eni to the Nigerian government, who had a separate agreement to pay the same amount to Malabu Oil and Gas, a company controlled by a former oil minister, Chief Dan Etete, according to Global Witness.

It said as Etete had awarded the oil block to Malabu Oil and Gas while minister during the regime of the late Gen. Sani Abacha, he had effectively given himself one of the most lucrative oil blocks in the country.

The Director of Global Witness, Simon Taylor, was quoted in the statement as saying, “This is a billion dollar bombshell; Shell’s shareholders deserve to know the stakes. This deal is being investigated in several countries and could be cancelled altogether.

“Such shady deals expose investors to risks they do not know about, entrench corruption and rob people in countries like Nigeria of money they badly need for things like schools and hospitals. So why is Shell blocking laws that would bring such payments into the open? What else have they got to hide?”

While noting that Shell and Eni denied paying any money to Malabu Oil and Gas, Global Witness, however, said High Court proceedings and other evidences seen by it revealed that both firms were aware and in agreement that the deal was for the benefit of Malabu.

Global Witness stated, “If Shell and Eni’s claim that they purchased the oil block from the Nigerian government are true; then under the constitution, the $1.1bn should have been paid to the Nigerian government’s ‘Federation Account’. It was not.”

The country is currently generating about 2,000 megawatts of electricity, down from over 4,000MW recorded early last month, the Federal Government has said.

It also revealed that though power generation was a meagre 2,000MW; that was enough gas to produce over 6,000MW.

The government blamed the disparity in the generation potential and actual output on the activities of gas pipelines vandals.

Most power generating plants across the country produce electricity using gas-fired turbines.

Speaking on behalf of the government, the Permanent Secretary, Federal Ministry of Power, Dr. Godknows Igali, said the poor electricity supply was causing anger among consumers who were paying for what they hardly consumed.

Igali spoke at a training session on meter installation and maintenance organised by the National Power Training Institute of Nigeria for trainees under the National Power Sector Apprenticeship Scheme in Abuja on Tuesday.

He said, “Nigerians are not happy because power supply is not enough whereas they have to pay for electricity. Why is the supply not enough? It is because some Nigerians go to destroy our pipelines. They don’t allow gas to get to our power plants.

“We were doing 4,500MW; but now, we are doing about 2,000MW. But we are going to solve that problem. The nation will go over it. It is a phase and we will all go over it.

“I say this because the amount of gas we have now can give us more than 6,000MW. If we have 6,000MW, most parts of Nigeria can have power for at least 16 hours. But then, people will not allow that to happen.”

He regretted that power consumers were being forced to pay for what they barely consumed by way of estimated billing.

Igali said, “Even when the light is not there, what people are meant to pay for is not commensurate with what they consume. And that brings a lot of anger among consumers, who complain that they don’t get enough electricity but are billed very high.

“This is as a result of the estimated billing system. For what the power distribution companies do is that they guess, based on the size of a house, and approximate and charge you.

“So, the country is going to be embarking on a robust metering scheme. The Federal Government is involved in this and it is working with private companies in the sector. And that’s where you (trainees) come in; to ensure that the meters are properly installed and consumers are billed correctly.”

The permanent secretary told the trainees that one of the most critical cadres in the power value chain was an efficient workforce, including engineers who would install and maintain the electricity meters.

Igali said, “You should be able to monitor electricity consumption as well as maintain the meters. So, where electricity theft occurs, you as the persons maintaining the meters should be able to know.

“And you should ensure that customers are properly billed because we have been relying on estimated billing. As much as about nine million consumers don’t have meters. The metering gap in Nigeria is about 60 per cent.”

The Director-General, NAPTIN, Mr. Reuben Okeke, said the trainees would be trained on how to stop tampering with meters by power consumers.

A cross section of Nigerians have condemned the planned payment of about N9bn as perks to ministers and lawmakers who will assume office in the government of President-elect, Gen. Muhammadu Buhari.

The newspaper on May 9, 2015, in an investigative report, said lawmakers to constitute the 8th National Assembly and ministers to be appointed by Buhari would receive N9bn as perks on assumption of office.

The perks include housing, furniture and motor vehicle allowances, among others.

For instance, the housing allowance for the lawmakers is 200 per cent of their annual salaries; furniture is 300 per cent and motor vehicle loan is 400 per cent.

The report, which has been read about 40,000 times on www.punchng.com as of Friday, generated mixed reactions from the public, many of who demanded pay cut for political office holders in the country.

The readers questioned the payment of such allowances at a time the country’s revenue has dipped.

Chika Kema Junior, one of the readers, said, “All these furniture, car, whatever allowances are unnecessary. I still recommend pay as you go allowances for senators and members of the House of Representatives.

“That is, payment should be done based on sitting, and shouldn’t be more than N300, 000 for senators and N200, 000 for members of the House of Representatives.

“Minister for state positions should be scrapped immediately as they are wasteful. Ministers’ salary should not be more than N150, 000 per month. However, they can have leverage in the purchase of houses or cars since they are government servants.”

Another Nigerian, Michael Akinmola, described the allowance package for the lawmakers and ministers as “alarming” and “ridiculous.”

He said, “Are all these lawmakers living in another planet apart from the one we all live? If the answer is no, I see no reason why these salaries and allowances should not be reduced with immediate effect.

“This is one of the causes of corruption in the society. It is also one of the major reasons why politics in Nigeria has become a do or die affairs.”

Incidentally, state civil servants in many states across the country are being owed salaries following the recent fall in oil prices, fuelling the resentment felt by some Nigerians towards the allowances.

The Nigerians said it was unfair for the predominantly poor taxpayers to be funding the lavish lifestyle of political office holders.

A reader, Yetunde, described the current situation in the country as “completely outrageous.”

Her comment read, “Why should we pay for their domestic help, newspapers, entertainment, and all sorts of garbage?

“The current state of Nigerian economy can’t pay for these. I don’t see why vehicle loans should be given to any lawmaker. If they really need a car, they can approach the bank for loan. It is improper that we have to pay for the fuel and maintenance of a car that is considered personal.”

Another Nigerian, Oreagba Afolabi, wrote, “We should do away with these bogus allowances and work out something more reasonable. There should be nothing like constituency allowances.

“Let them get where they will stay (in the Federal Capital Territory). Enough of all this wastage, the common man on the street is suffering.”

The Federation Accounts Allocation Committee on Friday raised the alarm that the Nigerian National Petroleum Corporation has yet to remit $1.48bn into the Federation Account as directed by PriceWaterHouse Coopers in its forensic audit of the corporation.

PriceWaterHouse Coopers was last year hired to carry out the exercise following an allegation by the former Governor of the Central Bank of Nigeria, Lamido Sanusi, that $20bn was not remitted to the Federation Account by the NNPC.

Sanusi, who is now the Emir of Kano, had written a letter to President Goodluck Jonathan that $49bn was not remitted to the Federation Account by the NNPC. But following the controversy which the letter generated, a committee was set up to reconcile the account.

Sanusi later recanted and said the unremitted fund was $12bn. He later again changed the figure to $20bn.

PwC, in the report, had stated that while the total gross revenues generated from crude oil lifting was $69.34bn between January 2012 and July 2013 and not $67bn as earlier stated by the Senate Reconciliation Committee, what was remitted to the Federation Account was $50.81bn and not $47bn.

Of the $69.34bn, the audit report revealed that $28.22bn was the value of domestic crude oil allocated to NNPC, adding that the total amount spent on subsidy for Premium Motor Spirit amounted to $5.32bn.

FAAC had at its last meeting constituted a committee to find out the reasons for the delay in making the funds available to the three tiers of government.

Barely had the committee swung into action than the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, stated that the NNPC had begun refunding the $1.48bn into the federation account as recommended by the audit firm. She said, “The PriceWaterHouse Coopers forensic audit that was done a few weeks ago, in its recommendation, mentioned that $1.48bn was owed by NPDC for a block that had hitherto been assigned from the NNPC to NPDC, which is its subsidiary.

“They felt that the right process would be that NPDC will refund that money to the Federation Account. NPDC has apparently started those refunds and it is also in discussion with NNPC and DPR on same. So the refund has actually begun.”

But the Chairman, Forum of Finance Commissioners of FAAC, Mr. Timothy Odaah, while speaking on the matter during an interview with journalists after this month’s allocation committee meeting, insisted that no amount had been transferred to the account.

He said, “The most important thing is for the public to know that we campaign and demanded for it because it is the money meant for the states and the federal government as well as the local governments.

“Entirely, it is the nation and Mr. President has directed that the money be paid to the federation account including the minister of petroleum but it is important to know that we have not seen anything.”

Meanwhile, the Minister of State for Finance, Mr. Bashir Yuguda, on Friday said that N388bn was shared among the federal, states and local governments as statutory allocation for the month of April, 2015.

Yuguda announced this in Abuja when he addressed newsmen on the outcome of the end of this month’s FAAC meeting. He said, “The total revenue distributable for the month of April, including VAT of N75.1bn, is N388bn.”

Giving the breakdown of revenue among the three tiers of government, Yuguda said the Federal Government received N132.1bn, representing 52.68 per cent; while the 36 states got N67bn, representing 26.72 per cent. The local governments, he said, received N51.6bn, amounting to 20.60 per cent of the amount distributed.

He announced that N23.1bn representing 13 per cent derivation revenue was shared among the oil producing states.

On the constant lower revenue shared in the past months to, the minister said “frequent shut down and shut-in-trucks and pipelines at terminals continued to impact negatively on crude oil revenue.”

The minister advised the incoming administration to focus on the diversification of the economy, good governance and blocking of all revenue leakages to attain optimum service delivery.

The Senate on Thursday passed the 2015 budget of the Niger Delta Development Commission totalling N299.5bn

The budget comprised N271bn project (development) expenditure; N16.1bn personnel expenditure; N10.4bn overhead expenditure; and N1.8bn as capital expenditure.

The Chairman, Senate Committee on Niger Delta, Senator James Manager, told his colleagues at the plenary that the budget would be financed from projected revenue of N300bn, part of which will be drawn from N160bn contribution from oil companies.

He also said that the balance will come from the N70bn provision from the Federal Government; N40bn Ecological Fund; N20bn unpaid arrears by the Federal Government; N10bn being revenue brought forward and N100m as Internally Generated Revenue.

Manager said the budget also included N28.4bn non-project expenditure which comprised personnel, overheads and the internal capital representing 9.5 percent, against 8.43 per cent proposed in 2014.

He also said the N271bn approved as project development expenditure represents N90.5 per cent of the proposed budget, as against the 91.46 percent proposed in 2014.

The senator said, “It is pertinent to mention that due to the peculiar nature of the NDDC budget, the committee finds that it is necessary to separate the capital budget meant for use internally by the commission from capital budget meant for project development.”

He said the budget would be operative from January 1, 2015 to December 31, 2015.

He urged the senate to pursue the proper calculation and the release of 15 per cent statutory contribution by the Federal Government for the funding of NDDC.

He stressed the need for the senate to assist in enforcing the payment of the statutory 50 per cent of monies meant for NDDC member-states from the Ecological Fund with a view to enhancing the commission’s revenue base.

Manager also urged the senate to direct the management of NDDC to avoid “carrying out any virement in the approved budget without recourse to the National Assembly.”

Meanwhile, the senate in the plenary passed into law the Nigerian Immigration Amendment Bill, 2015, which repealed the Nigerian Immigration Act of 1963.

The upper chamber also passed into law the Nigerian Automotive Industry Development Plan Bill 2015.

Minister of Finance, Dr. Ngozi Okonjo-Iweala, on Sunday night said that despite the various challenges facing the country, the national economy will not collapse.

The minister, in a statement issued by her Special Adviser on Communications, Mr. Paul Nwabuikwu, said this during a chat with some journalists.

In the statement, she said that the administration of President Goodluck Jonathan had put in place solid economic legacies for the incoming government, noting that allegations that the economy was in ruins were untrue.

She said, “Despite the economic challenges the country is facing, the Jonathan administration is leaving some solid economic legacies for the incoming Buhari government. So, the allegations that the economy is in ruins are absolutely untrue.

“The significant achievements in several sectors attest to this. We cannot take away the fact that the Jonathan administration, in spite of the challenges caused by 50 per cent decline in the price of oil, has made a clear and measurable difference in many important areas and anyone who says nothing has been done and nothing is being left behind is being very unfair to facts and to history.

“Attempts to rewrite history will not stand. You cannot just wipe the slate clean for political reasons. We are not perfect but no one can take away the fact that we are leaving some good legacies behind.”

The minister also advised politicians and opinion leaders not to denigrate the economy because negative and false comments on the economy could have negative impact the economy, the exchange rate, the stock market and reduce investor confidence.

She said, “These negative and unsubstantiated comments are not wise because they can lead to what we do not want for the economy.

“There is nothing wrong with factual assessments of the economy; I have always told Nigerians the truth about the economy. But sweeping and negative statements are not in the interest of the country.”