Connect with us

Markets

Bankers Join Whistleblowing Bandwagon, Expose Illicit Transactions of Public Officers

Published

on

EFCC

Bankers, mainly account officers, have started to take advantage of the federal government’s whistleblowing policy to report the wrongdoings of former and current public office holders suspected to have embezzled public funds and stashed them in several Nigerian banks.

A reliable source with the Economic and Financial Crimes Commission (EFCC), who disclosed this at the weekend, said that some bankers have been encouraged largely by the reward of between 2.5 per cent (minimum) and five per cent (maximum) of the total amount recovered.

According to the source, several former and current public officers who had allegedly stolen from the treasury either hid the physical cash in safe houses or used shell companies, close aides, associates and family members to stash the ill-gotten funds in bank accounts using the names of the companies or their friends, family members and associates.

However, though the accounts are not in the names of the political office holders, they usually operate the accounts themselves, a fact that is well known by the bank account officers who help them to manage the accounts.

As a result, since the federal government unveiled the whistleblowing policy as a means of recovering stolen public sector funds, a number of junior and middle-level bankers have been quietly ratting on the true beneficiaries of the accounts in order to cash in on the rewards derivable from the policy.

The EFCC source said that once the commission is contacted by a banker, it is usually easy to identify the real beneficiary of the bank accounts through the Bank Verification Number (BVN), since an account holder can only have one BVN for all of his individual and company accounts.

The source said: “Junior to middle-level account officers in the banks are the major whistleblowers. That is why we (EFCC) have been recovering a lot of money since the policy was unveiled.

“They are ratting on politicians and public office holders. Some of these politicians use shell companies; some use companies in which they are not even directors or shareholders. Some also use friends, family members and associates.

“But because the public office holders still manage the accounts themselves, the BVNs can still be traced to them.

“For instance, once there is a suspicious bank account, the account officer informs the EFCC, which in turn carries out the investigation and then gets a freeze order on the account(s), following which the suspect will be invited for interrogation.”

Also the $9.8 million recovered by the EFCC from a former Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Dr. Andrew Yakubu, was the fallout of a clash between Yakubu and his political opponents in Kaduna States, who used a very close family member of the former NNPC boss to snitch on him to the anti-graft agency.

A special operation conducted by EFCC operatives on February 3, 2017 on a building belonging to Yakubu in Kaduna, yielded the staggering sum and another £74,000 in cash. The huge cash was hidden in a fire proof safe in the building.

However, the EFCC source explained that the family member, whose identity has been kept under wraps for security reasons, may not be entitled to the reward provided in the whistleblowing policy, because Yakubu who has maintained that the cash found in the house was a gift, has challenged the temporary forfeiture order obtained by the EFCC from the court to the federal government.

“Should he win his case and the amount returned, the whistleblower will not be entitled to anything,” the source said.

The source said one way that the government could encourage more whistleblowing is by being transparent on how much has been paid to individuals who have gone on a limb to expose illicit transactions without disclosing their identities.

“That way, more people will be encouraged to expose illegal activities in their organisations and in the public sector,” he said.

The federal government last December approved a whistleblowing policy to expose fraud and other related crimes in both the public and the private sectors.

Finance Minister, Mrs. Kemi Adeosun, had while urging Nigerians to key into the scheme said the policy devised by her ministry was aimed at encouraging anyone with information about a violation, misconduct or improper activity that impacts negatively on Nigerians and government to report it.

According to her, the policy’s objective is to increase exposure of financial or financial-related crimes; support the fight against financial crimes and corruption; improve the level of public confidence in public entities; enhance transparency and accountability in the management of public funds; improve Nigeria’s Open Government Ranking and Ease of Doing Business Indicators; and recover public funds that can be deployed to finance Nigeria’s infrastructure deficit.

She listed information that could be submitted to include: mismanagement or misappropriation of public funds and assets (e.g. properties and vehicles); financial malpractice or fraud; collecting/soliciting bribes; corruption; diversion of revenue; fraudulent and unapproved payments; splitting of contracts; procurement fraud (kickbacks and over-invoicing etc.).

The minister defined a whistleblower as any person who voluntarily discloses information in good faith about a possible misconduct or violation that has occurred, is ongoing, or is about to occur.

The reward for a whistleblower was put at between 2.5 per cent (minimum) and five per cent (maximum) of the total amount recovered.

Meanwhile, the federal government at the weekend reiterated its desire to protect and reward whistleblowers whose information provide leads in the recovery of stolen funds and assets.

The Minister of Information and Culture, Alhaji Lai Mohammed, made the assurance to the public in a statement after concerned citizens drew the attention of the Presidential Assets Recovery Committee to the recriminations whistleblowers were being subjected to in some public establishments.

While reiterating the desire of government to reward whistleblowers in both the public and private sectors, Mohammed assured them that their identity would be protected and the information they disclosed kept secret.

“’For those who may have suffered any backlash as a result of the information they provide, their cases will be reviewed and appropriate mitigating actions taken.

“Whistleblowers have nothing to fear, because the committee has put in place the necessary measures to safeguard those who give useful information.
“As a matter of fact, whistleblowers have everything to gain and nothing to lose,” he said.

Mohammed stressed that in line with the policy, anybody whose information leads to the recovery of up to N5 billion could be rewarded handsomely to the tune of N210 million, calculated as N50 million on the first N1 billion (five per cent) and N160 million which is 4 per cent of the remaining N4 billion.

He added further that any amount that exceeds N5 billion would attract a higher reward.

“For example, if a whistleblower provides information leading to the recovery of N10 billion, he or she will receive 5 per cent of the first N1 billion, 4 per cent of the next N4 billion and 2.5 per cent of the remaining N5 billion.
“What we have done by making this information public is to reassure potential whistleblowers that the plan to reward is real. We are not just saying we will pay all whistleblowers, but we are letting them know in advance what they are entitled to once the information they provide leads to the recovery of looted funds,” he said.

A civil servant working for the Foreign Affairs Ministry was said to have been sacked after exposing alleged theft in an agency of the ministry.

His case is now under review by the minister, Geoffrey Onyeama, following the directive of Vice-President Yemi Osinbajo.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Energy

African Energy Developments Demand Sustained Investment With New Projects in Mozambique, Tanzania, Uganda, and Senegal

Published

on

Workers

In the past twelve months, the African energy sector has seen several encouraging developments – in the form of both Foreign Direct Investment (FDI) and strategic partnerships – that have advanced the sustainable development of its natural resources. In fact, despite a global downturn in investment in 2020, FDI flows to developing economies accounted for 72% of global FDI, the highest share to date. Given the magnitude of Africa’s oil and gas reserves – not to mention its abundant renewable resource wealth – the continent remains a highly attractive market for inbound investment, which is vital for its growth.

Take Uganda, for instance, which is home to one of the largest onshore discoveries in sub-Saharan Africa. Following multiple petroleum discoveries in Uganda’s Albertine Graben – estimated to contain 6.5 billion barrels of oil, of which 1.4 billion are considered recoverable – foreign investments into the country are expected to reach nearly $20 billion. Last April, Total E&P Uganda B.V. signed a Sale and Purchase Agreement with Tullow Oil PC, through which Total will acquire Tullow’s entire 33.34% interests in Uganda’s Lake Albert development project and the East African Crude Oil Pipeline (EACOP). Five months later, the Ugandan Government and Total signed a host government agreement for EACOP, representing a significant step toward reaching a final investment decision. The deal pushes along an extended development process – slowed by infrastructure issues, tax complications, then COVID-19 – that not only promises to bring first oil by 2022, but also provides a pathway to monetization via associated transport infrastructure.

In addition to developments at Lake Albert, the Ugandan Government has proven its commitment to attracting FDI to its hydrocarbon sector through its second licensing round held last year, as well as its invitation to local and foreign entities to forge joint-venture partnerships with the Government. By prioritizing the establishment of mutually beneficial partnerships, the emerging East African producer aims to facilitate the successful transfer of skills, knowledge and technology, initiating an influx of technical expertise and working capital into the country.

“Those who have been locked out from access to opportunity want the same from the energy sector that the energy sectors want from governments.  We must not forget local content, local jobs, local opportunities especially for young people and women” Stated NJ Ayuk Executive Chairman of the African Energy Chamber.

Meanwhile, in West Africa, Senegal has been reaping the rewards of a long-standing partnership with Germany, which has resulted in more than one billion Euros in funding, including significant support for small-scale power plants and renewable energy projects. Holding sizeable potential for solar and wind energy development, Senegal serves as a regional leader in renewable deployment as a means of rural electrification. Indeed, energy is a central component of poverty alleviation across Africa, with electricity access enabling greater independence, clean cooking and potable water, as well as dramatically improving the well-being of individuals, businesses and communities alike.  Rural populations are cognizant of the challenges posed by a lack of stable electricity supply – increased urban migration, lack of access to basic services, low economic competitiveness, to name a few – and distributed renewables can represent the fastest and least expensive path to electrification.

European interest in Senegal has shed light on and served as a model for co-operation opportunities between renewable-rich African countries and developed partners, which offer cutting-edge technologies and technical expertise to transform raw resources into viable off-grid and mini-grid solutions.

Furthermore, while the cost of deploying renewable technology has never been lower, the availability of renewable-focused capital has never been higher. Investment in commercial and industrial solar has demonstrated resilience against the pandemic, continuing to be seen as a safe investment in light of rising utility costs and increasing distribution of both solar and financial technologies. Yet resource potential and low costs of equipment are not enough; Senegal and other resource-rich African nations require active investor interest and strong government support to unlock diversified energy mixes. In turn, a lack of investment represents a pointed threat to the achievement of long-term energy security.

“Young people and women have shown their great resilience, and it is our hope we close these deals in the renewable energy sector, Africans can have a sense of some hope that they will be included in the industry contracts and opportunities. It is no longer correct for the African to be the last hired and the first fired” Concluded Ayuk.

Moreover, without sustained levels of FDI continuing to move the needle on oil, gas and renewable developments, energy export revenues run the risk of being stranded and resources left undeveloped. For emerging producers like Uganda – as well as Tanzania, Kenya, Mozambique, among several others – this would mean foregoing critical government revenues that could aid in a much-needed, post-COVID-19 economic recovery. FDI is vital to Africa’s growth, and while it may be challenging to procure capital in a tepid global economy, it is even more difficult not to. Yes, COVID-19 has put emerging producers in a tough spot: new exploration is seen as risky, and new producers lack existing assets or low-cost development of marginal fields on which to fall back. However, it is not an option to slow or postpone time-sensitive developments that promise to harness natural resource wealth and make sustainable improvements in standards of living across the continent. Africa requires a sustained flow of investment and has proven time and again that it offers the scope of projects and magnitude of resources that are worthy of foreign capital.

Continue Reading

Energy

Saudi Aramco’s Profit Halved in Two Years, Market Cap $210B Below Apple’s

Published

on

Even before the pandemic, the oil and gas industry was faced with slumping prices. However, with a record collapse in oil demand amid the lockdowns, the COVID-19 crisis has further shaken the market, causing massive revenue and market cap drops for even the largest oil companies.

According to data presented by Finaria.it, the net income of the world’s biggest oil producer and one of the largest publicly listed companies, Saudi Aramco, dropped to $49bn in 2020, a 55% plunge in two years.

The COVID-19 Crisis and Oil Price War Cut Profits by Almost $40B in a Year

In preparation for its IPO, which took place in December 2019, Saudi Aramco had published 2018 profits. With a net income of $111.1bn, Saudi Arabia’s state-run oil giant ranked as the most profitable publicly listed company in the world.

Global macroeconomic concerns like the US-China trade war and the oil overproduction set significant price drops even before the coronavirus outbreak. In 2019, the company reported a profit of $88.2bn, a 20% drop year-over-year.

However, a standoff between Russia and Saudi Arabia in the first months of 2020 sent prices even lower and caused a massive hit for Saudi Aramco’s profits.

After global oil demand plunged in March, Saudi Arabia proposed a cut in oil production, but Russia refused to cooperate. Saudi Arabia responded by increasing production and cutting prices. Shortly Russia followed by doing the same, causing an over 60% drop in crude oil prices at the beginning of 2020. Although OPEC and Russia agreed to cut oil production levels to stabilize prices a few weeks later, the COVID-19 crisis already hit.

In March, Saudi Aramco announced full-year figures for the second time since going public, and the results revealed huge financial losses. In 2020, Saudi Arabia’s state-run oil company reported a net income of $49bn, almost a $40bn drop in a year.

While Saudi Aramco was the most profitable publicly listed company globally in 2019, the current result puts the company behind Apple, which reported a net income of $57.4bn in 2020.

Saudi Aramco’s Market Cap $210B Below Apple’s

In December 2019, Saudi Arabia’s state-run oil giant completed its long-awaited IPO and hit a staggering $2 trillion valuation on the second day of trading, nearly one trillion higher than the world’s next-largest publicly listed companies Microsoft and Apple. The initial public offering was an essential part of Crown Prince Mohammed bin Salman’s Vision 2030 program to transform the Saudi economy.

However, Saudi Aramco’s stocks were outperformed by Apple in 2020. After plunging to $1.61trn in March last year, the market cap of the Dhahran-based company jumped to $2.15trn in September. By the end of the year, this figure slipped to $2.05trn. Statistics show that Saudi Aramco’s market cap floated around this value for the last three months and then dropped to $1.87trn in April after the company revealed the full-year results.

Although valued one trillion less than Saudi Aramco at the time of its IPO, the world’s largest tech company, Apple’s, has seen its market cap surge last year. In January 2020, the combined value of shares of the US tech giant stood close to $1.4trn. After plunging to $1.1trn in March, Apple’s market cap soared to over $2.3trn in December. Although this figure slipped to $2.08trn last week, it still represents almost a 90% increase in a year.

Continue Reading

Crude Oil

Oil Inches Higher But Rangebound as COVID-19 Cases Soar

Published

on

Crude oil

Oil prices edged higher in rangebound trade on Monday on optimism about a rebound in the U.S. economy as vaccinations accelerate, but rising COVID-19 cases in other parts of the world kept a lid on prices.

Brent was up 22 cents, or 0.4%, at $63.17 a barrel by 0843 GMT. West Texas Intermediate (WTI) U.S. crude rose 12 cents, or 0.2%, to $59.44 a barrel.

The prices have remained rangebound in the last three weeks, with Brent between $60 and $65 per barrel and WTI at $57 to $62.

“Oil prices are entering a consolidation phase after swinging wildly last month,” Stephen Brennock of oil broker PVM.

“While there are still plenty of reasons to be bullish, market players have become more cautious as infections have surged in Europe, India and some emerging markets, while vaccine rollouts have proved slower than anticipated,” he added.

India now accounts for one in every six daily infections worldwide, and other parts of Asia are seeing infection rates rise.

Asian oil demand remained weak and some buyers asked for lower volumes in May partly because of refinery maintenance and higher prices.

The United States has fully vaccinated more than 70 million people but U.S. gasoline demand has not picked up as much as expected.

The U.S. economy is at an “inflection point” amid expectations that growth and hiring will accelerate in the months ahead, but faces the risk of reopening too quickly and sparking a resurgence in coronavirus cases, Federal Reserve Chair Jerome Powell said in an interview broadcast on Sunday.

“There really are risks out there. And the principal one just is that we will reopen too quickly, people will too quickly return to their old practices, and we’ll see another spike in cases,” Powell said in a CBS interview, recorded on Wednesday.

On the production side, no new oil drilling rigs were started in the United States in the most recent week, a report published by Baker Hughes showed.

Continue Reading

Trending