If the Nigeria Liquefied Natural Gas Limited (NLNG) were to be a woman, she would most likely be a beautiful, curvaceous, voluptuous and generally desirable damsel. Her figures say it all: Established in 1989 with an impressive capital outlay of $6 billion (including the $2.5billion equity/loan from the federal government, through the NNPC) the company now has an asset base of over $11billion and has generated over $90 billion in revenue. Over the last 12 years, it has paid over $15billion to the federal government as dividends on the $25 billion investment. It has also paid sundry taxes to federal states and local governments to the tune of about $5.5billion and N51billion. This sure is one hell of a honey pot. No wonder, our lascivious politicians are determined to dig their fingers into her and serially gang-rape her!
But even the NLNG has not helped matters: instead of wearing an all-covering hijab to conceal her tempting contours, she chose to wear a fitted mini-skirt to flaunt her endowments before ogling dirty old men.
Yes! That was exactly what it did when it made the ‘mistake’ of remitting outstanding tax obligations to the federal government, thereby providing the fund with which the Buhari government bailed out our states that were too broke to even pay workers salaries. Now it has drawn unnecessary attention to itself. Now, every looter (politician and all) out there wants a part of the action. Suddenly the politicians have discovered the multi-trillion dollars waiting for the taking.
Everyone is now desperate to share in the NLNG ‘racket’. Unfortunately, the NLNG is not one of those places where contractor politicians could go pick up contracts easily. Even if you succeeded in landing a contract, you could not collect mobilization fee and abscond. Instead of sharing the money to politicians and lobbyists, NLNG wasted a whooping $200million doing CSR, constructing road, providing potable water, schools, uninterrupted power supply, awarding scholarships and instituting literary prize. To make matter worse, it rolled out an ambitious plane to sink N3billion into its host community Bonny, with a view to transforming it into a Nigeria’s Dubai. It even committed to provide 50% of the N60 billion it would cost government to do the Bonny-Bodo Road. Throwing around so much money without factoring in the politicians pockets. There just had to be a way to break (or break into) the NLNG.
Enter the NLNG (Fiscal Incentives, Guarantees and Assurances) Bill!
In consonance with a handful of parasitic businessmen, whose only business model is to have their suckers permanently affixed to the capillaries of government, these politicians (both in the executive and the legislative arms) had tried to get the federal government to privatize the NLNG, under the pretense of raising funds to bail the country out of the current recession.
However, when they discovered that the NLNG is not a wholly Nigerian owned venture; that Nigeria, represented by the NNPC, owns only 49% equity in the business (the other shares being held by Shell, Total and ENI), they then began another campaign to get the federal government to sell off its shares to Nigerians, as government actually has no business in business.
Of course, many of us right thinking Nigerians kicked against it.
But then, I’m not averse to government divesting from certain businesses and allowing private investors to take over. My only fear is that a few dubious individuals, and their fronts, would have been waiting in the wings to hijack the shares and ultimately constitute themselves into a monopoly – or, at best, an oligopoly.
The sale would never be transparent – meaning, no ordinary Nigerian, like you and I, would ever get the chance to buy even one unit of shares.
Luckily, President Muhammadu Buhari heard our cries and ignored the looters nudging him to sell.
With that call having failed, they have now gone through the National Assembly (where, I’m told, no one stands up to push any motion on an empty pocket) to get the lawmakers to amend the NLNG Act – to, among other things, compel it to pay 3% percent of its annual budget to the NDDC. The permutation, I suspect, is that, at NDDC, it would be easier to indirectly access the dollar rain at NLNG.
Of course, I don’t believe this allegation against our “Honourable’ and ‘Distinguished’ lawmakers. It is just that I’m baffled that nobody seems to be spearing a thought for the consequences of this unilateral amendment, which the Reps passed yesterday. But there would be huge consequences if the Senate finally ratifies the bill as the House of Reps passed it yesterday.
Yes, the NLNG Act is not cast in stone. It can actually be amended. But the statutes clearly state how this can be done.
The law says before an amendment can be made, all the stakeholders would have to be involved. That has not been the case with this new amendment.
Although the amendment Bill has gone through a lot of transformation from when it was originally sponsored, the nagging issues remain unchanged. The issues essentially are: payment of 3% of NLNG’s annual budget to NDDC and the removal of the guarantees and assurances provided for in the existing Act.
Although 3% of the budget might not kill the NLNG, it would definitely cause a lot of financial bleeding. But that is not all the danger: the bigger danger is removing the assurances and guarantees. That would be like going for the jugular of NLNG. It could well be the final nail on the coffin.
It would mean that NLNG would be liable to pay all the other numerous taxes and levies it is currently exempted from – including that for which NLNG and NIMASA dragged themselves all the way to the supreme court, and which was ruled in NLNG’s favour. The amended Act, I learnt, would instantly wipe out nearly 40% of NLNG’s earnings.
The implications of this is that even if the NLNG could struggle to keep its existing six trains running, Nigeria might as well kiss the proposed 7th train goodbye – and with it, the expected $20 billion investment. And jobs too.
The other investors who jointly make up the remaining 51% are also likely to withdraw from the project.
Of course, they would not withdraw without a fight. Since the home countries of each of the other three stakeholders (United Kingdom, France and Netherlands) has a bilateral agreement with the Nigeria government, it is almost logical that they would drag the country to international courts over the breach of agreement. And like Ecuador and one two other countries that have trod this ignoble path, the fines that would be awarded against Nigeria could run into trillions of dollars.
And there’d still be more trouble for our country: we would have clearly told other foreign investors that the future of their investments in Nigeria cannot be guaranteed. This is not exactly what we should be communicating to the rest of the world in this period that every extra dollar into the economy goes along way.
If we pretend that we can call the bluff of these stakeholders and they leave, even our crude oil production would ultimately suffer. The reason is simple: with the NLNG off-taking the associated gas that from crude oil exploitation, Nigeria has been able to reduce gas flaring from 65% to about 20%. If the NLNG shuts down, we’ll have to return to gas flaring. The danger in this is that we would soon overshoot the globally acceptable threshold for gas flaring. That would mean automatic sanction against us. More trouble!
Surely, this is a classic case of killing the goose that lays the golden egg.
However, now that the NLNG has been stripped naked with this new Act, I guess the gang-rape can now begin. Painfully, they’ll do the raping without condoms.