Nigeria’s Missing Oil Money Sparks Political Crisis

Over a month after Nigerian President Goodluck Jonathan suspended the country’s Central Bank governor after he blew the whistle on $20 billion in oil money allegedly missing from state coffers, a forensic audit team has still not been formed.

Officially, President Jonathan suspended Central Bank Governor Lamido Sanusi in mid-February because of “financial recklessness and misconduct” and “far-reaching irregularities” at the bank, but the move is being widely interpreted as an attempt to silence a whistleblower.

Last month, Sanusi told a senate committee that out of $67 billion worth of Nigerian oil sold between January 2012 and July 2013, $20 billion had not been accounted for.

Sanusi accused the Nigerian National Petroleum Corporation (NNPC) of either diverting or stealing the missing funds.

The governor provided a dossier containing hundreds of pages of data, expert and legal opinion in the form of contracts to Senate investigators, in support of his allegations of major fraud at the NNPC.

The NNPC’s response was that the allegations demonstrated “little understanding of the technicalities of the oil industry.”

Sanusi told the BBC he would challenge his suspension in order to preserve the central bank’s independence anddragged Jonathan before a Federal High Court over his suspension from office.

“The reality is anyone who challenges the oil sector is striking at the heart of the vested interests that control the Nigerian state and one should be ready for the consequences,” he said.

The Economist reported recently that the NNPC deliberately overestimated the cost of importing refined products, made necessary because the NNPC has failed to build more refineries while billions of dollars for renovating the four existing refineries have vanished over the years.

The scandal is likely to play a major role in the run-up to 2015 presidential elections in Nigeria and could harm Jonathan’s chances of winning another term in office. For this reason, the Central Bank Governor’s accusations are also alleged by the President to be politically motivated.

This piece is cross-posted from OilPrice.com with permission.