Wednesday, June 11, 2008

A snapshot of the Nigerian economy...

Bonga is Shell's largest FPSO (Floating Production Storage and Offloading) in the Gulf of Guinea, capable of processing 225,000 barrels of stabilised crude every day, and with tank space to store 2 million barrels.

In other words, this ship (in a deep offshore location) is a significant portion of Nigeria's entire economy. A Presidential Investigation Committee report on the Production Sharing Contracts (Bonga is part of a PSC agreement with the Federal Government) a couple of weeks ago indicated that Shell and Esso (which operates the Erha field) owe the Federal government potentially several billion dollars in unpaid revenue.


The Pseudo-Independent 10:02 am  

Asides the fact that Shell and Esso (which operates the Erha field) owe the Federal government potentially several billion dollars in unpaid revenue, I know the developed world, contrary to media, have encouraged developing countries to overlook corruption and pressured governments to drop corruption investigations. This is also fueling the rape of our economy.

In relation to the below post (windfall) no doubt, the windfall is likely because many firms have benefited from increases in oil prices brought about by the soar without needing to make any extra investment in return.

However, I am making the reference to corruption on the basis of my experiences in Nigeria shortly after my arrival last June. I worked with a Nigerian firm in partnership with a foreign company (the world’s leading computer chip manufacturer). I also introduced them both to a number of ministers I knew (use of the word knew cos have had to keep a long distance for my sanity). I found sickening the current state of their project (providing specially designed - Chinese built - laptops to our children). Sickening, does not even begin to describe it. This device (classmate pc) just seems impractical, it doesn't teach anything and just gloats. The whole project is premised on the flawed philosophy of constructivist education and won't do much to help the poor.

These government officials regularly back deals that are obtained corruptly. Many do not even require the contracts they back to have been won through competitive tender, which can be a sure way to ensure they get value for money. Sometimes you have the same firm pursuing the same contract under 10 different names! Matters are made worse when about 50% of the total project cost is channelled into pockets. With that, how can we develop infrastructure of international standard? If it will cost 1 kobo to upgrade the IT and Telecoms infrastructure for the nation’s hospitals for us to be in a position to run stuff like telemedicine, emr’s etc then for God’s sake the entire 1 kobo should be used.

I know that even though bribery is difficult, increasingly sophisticated and potentially expensive to prove almost 199% of Nigerian firms and government officials engage in corrupt activity and this is fuelled by the long history of our anti-corruption institutions at turning a blind eye to graft. When allegations of corruption do arise, the Nigerian anti graft agencies will often merely ask the companies to cover their tracks and ensure that no record of wrongdoing took place and will not investigate.

Am out of gas!

anonymaus,  5:26 pm  

Pseudo-independent, thanks for that insider's view on how corruption is eroding the nation's capacity to grow and move forwards.

The one good thing, I can attempt to throw onto the topic is that "no one know's tomorrow", so there is a faint hope of things improving (but don't hold your breath, suffocation is not a good way to go...)

Anonymous,  7:32 pm  

When citizens blatantly corrupt their own home, it makes it much easier for foreigners to do the same.

About This Blog

  © Blogger templates Psi by 2008

Back to TOP