Former Chairman of the Economic and Financial Crimes Commission (EFCC), Abdulrasheed Bawa, has revealed that Nigeria lost $450 million to fraud under the Petroleum Support Fund (PSF) between 2006 and 2012.
Naija News reports that Bawa made the disclosure in his newly released book titled “The Shadow of Loot & Losses: Uncovering Nigeria’s Petroleum Subsidy Fraud”, which chronicles the deep-rooted corruption that plagued Nigeria’s petrol subsidy regime.
The former EFCC boss, who led a special investigation team during his tenure at the commission, stated that several oil marketers were found culpable and subsequently faced prosecution.
Bawa also provided insight into Nigeria’s broader subsidy burden, estimating that the country has spent more than ₦16.5 trillion on petrol subsidies since the return to democratic rule in 1999.
He said, “Our investigations revealed that, as admitted by the oil marketing companies involved, fraud related to petroleum subsidies exceeded N68 billion, which translates to over $450 million in direct fraudulent activities. This fraud involved 59 out of the 141 companies that participated in the PSF scheme from 2006 to 2011. We also uncovered fraudulent claims amounting to ₦19.6 billion on issues related to traders (sellers), of which the oil marketing companies denied knowing anything about,” Bawa wrote.
“Our investigation further identified an attempted fraud of N9.4 billion wherein oil marketing companies forged documents to align with altered dates on the mother vessel bills of lading to secure higher subsidy payments. However, due to existing contingencies in the application of the guidelines, these altered bill of lading dates were ultimately not utilized.
“Interestingly, there were no recorded infractions in 2006 and 2007. However, by 2008, 2009, and 2010, we uncovered significant fraud totalling ₦11.5 billion, ₦4.88 billion, and ₦10.3 billion, respectively. 2011 marked what I consider the peak period of petroleum subsidy fraud, during which we identified fraudulent activities amounting to ₦41.7 billion. In total, the fraudulent schemes accounted for approximately ₦68 billion, of which around 80% has been recovered. The unrecovered funds are associated with cases still pending in court or involve promoters who have since passed away.
“These direct losses in revenue, alongside many additional undisclosed amounts and indirect revenue losses, could have been used to finance essential public services, infrastructural development, and social welfare initiatives. Sadly, the fraudulent drain on public funds has exacerbated fiscal deficit, resulting in budget cuts in critical sectors such as education, healthcare, and social welfare programs.
“Table 6.1 presents the financial reports of subsidy payments under different administrations since Nigeria’s return to democracy in 1999. Over the last 25 years of democratic governance, Nigeria has expended a staggering ₦16.5 trillion on subsidies.”
Bawa added that a “substantial portion of the expenditure” was linked to false claims and theft from the national treasury.
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