When Afrobeat beat legend, Fela Anikulapo Kuti, made the now historic submission that corruption in the form of authority stealing constituted a far greater threat to Nigeria’s development than armed robbery, little did he know that he was being prophetic. It was 1980, and Fela in his peculiar style of activism did try to raise the nation’s consciousness to the dangers of reserving the most severe punishment possible under the law for petty criminals while celebrating politicians who stole billions at the flick of a pen.
But not even abami eda at his prophetic best could have imagined the extensive manifestation of the concept of authority stealing in Nigeria’s public life as we have seen over the last few years. Amidst the plethora of headlines in Nigeria over the last decade, you’d be hard-pressed to find a better exemplification of legitimization of corruption than the recently terminated boats pilotage monitoring and supervision agreement that the Nigerian Ports Authority (NPA) had with Integrated Logistics Services Limited (Intels).
A core part of NPA’s mandate as the nation’s chief maritime industry overseer is the provision of safe and navigable channels as well as ensuring the safety and security of ships’ passage within Nigeria’s seaports. In the fulfillment of that mandate, NPA provides pilotage services to guide ships into and out of the seaports. Globally accepted operation standard in the maritime industry is that pilotage be compulsory for all ships of 35 metres overall length of greater. In return for this service, ship owners and companies pay a pilotage fee.
In 2010, the NPA struck an agreement with Intels to act as its agent for the provision of pilotage services within Nigeria’s seaports. Under the agreement, Intels collects on NPA’s behalf payments made by ship owners and companies as pilotage fees and takes 28 percent of the revenue as commission for the services rendered. Curiously, the agreement failed to make provision for any sharing formula for the remaining 72 percent revenue, leaving remittances to the NPA an issue of mutual understanding. Thus, this business arrangement between the NPA and Intels became fraught with so many irregularities leading to the loss of millions of dollars in revenue that should have accrued to the Nigerian people.
As documents obtained by investigative journalists working on the issue have revealed, from 2013 to March 2014, Intels remitted an average sum of $3 million monthly to the NPA, representing 18 percent of the average revenue of over $16.2 million collected monthly within the period. From April 2014, Intels remittances to the NPA was reviewed upward to $5.6 million monthly, about 33 percent of the monthly revenue of $16.9 million collected. However, in 2016, they brought the amount remitted to NPA monthly down to $3.6 million, 28 percent of the over $12.5 million collected monthly at that time. The NPA management kicked against this but was incapacitated as Intels had custody of the entire revenue.
Earlier in 2015, President Muhammadu Buhari as part of reforms in public finance management mandated the implementation of a Treasury Single Account (TSA) policy. This policy, among other things, effectively eliminated the revenue leakages associated with multiple banking arrangements by government parastatals. In compliance with the TSA policy, the NPA in June 2016 asked Intels to remit all Service Boat Pilotage Revenue collected to the authority’s TSA sub-account at the Central Bank of Nigeria (CBN). The letter further stated that periodic reconciliation of the account would be carried out to determine Intels’ commission which will then be paid into its account by the CBN from the same TSA account.
Intels refused to comply with this directive, citing loans it took from some commercial banks as an impediment to the TSA policy. As documents further reveal, the total service boat revenue collected by Intels from January 2010 to September 2016 was $1.295 billion. Out of this amount, Intels remitted a total of $343.35 million to the NPA, representing 27 percent of the total revenue collected. Intels 28 percent commission according to the agreement was $353.066 million which was deducted electronically from the revenue.
From January to May 2017, all efforts by the NPA to get Intels to comply with the TSA policy proved abortive. Rather than cooperate with the NPA in finding an amicable solution to the issue, including the implementation of proposed standard operating procedures, Intels wrote to the Chairman of the Senate Committee on Marine Transport, claiming a debt of $840 million.
This imbroglio informed the decision of the Managing Director of the NPA, Hadiza Bala-Usman, to write the Attorney-General of the Federation and Minister of Justice, Mallam Abubakar Malami (SAN) for clarification of this conflict between the Intels agreement and the TSA policy. The AGF’s response, dated September 27, 2017 expressly stated that the agreement, which has allowed Intels to receive revenue on behalf of NPA for 17 years, violates the Nigerian Constitution, especially in view of the implementation of the Treasury Single Account (TSA) policy of the government.
According to the AGF, the contract agreement for the monitoring and supervision of pilotage entered into with Intels in 2010 is void ab initio as it runs contrary to the express provisions of Sections 80(1) and 162(1) and (10) of the 1999 Constitution of the Federal Republic of Nigeria (as amended), which mandates that such revenue must be paid into the Federation Account/Consolidated Revenue Fund.
This letter from the nation’s foremost legal officer informed last week’s decision by the NPA management to terminate the illegal Intels contract. Using conservative exchange rates, Intels has received over N100 billion as commission from an illegal contract since 2010. Not only that, Intels has also refused to fully remit at least N20 billion out of the revenue it collected on behalf of the Nigerian government under the illegal arrangement.
Either by ignorance or deliberate mischief, some commentators have gone the route of interpreting the contract termination as a political move, making allusions to the fact that former vice president Atiku Abubakar co-founded Intels. It is hardly surprising that these same groups have been vocal antagonists of the anti-corruption agenda of the Buhari administration. The Intels contract violates Nigeria’s democratic essence and its termination is both legally and morally expedient.
As shocking as it sounds, this is only one of many such ports contracts that previous administrations have used to create unfettered access to public revenue for their cronies. A couple of months ago, the NPA also had to terminate an illegal joint venture contract given to Niger Global Limited. The opposition to the ongoing reforms at the NPA is therefore not unexpected.
Nigeria’s development into an economic powerhouse is hinged on the strength of our leadership and the political will to take the tough decisions irrespective of whose ox is gored. This the government through the NPA management has done on the Intels issue, and Nigerians should actually demand more of such in the battle to liberate our nation from the shackles of economic parasitism and authority stealing.
Saka Mahmood writes from Abuja.
