NNPC took illegal N1.4tn fuel subsidy –NEITI

FEBRUARY 1, 2013 BY EVEREST AMAEFULE 12 COMMENTS

Chairman, NEITI, Mr. Ledum Mitee
| credits: newsdiaryonline.com

The Nigerian National Petroleum Corporation illegally paid itself the sum of N1.4tn between 2009 and 2011 as petrol subsidy, a  Nigerian Extractive Industry Transparency Initiative audit report for 2009 – 2011, has shown.

The highlights of the report presented by the Chairman of NEITI, Mr. Ledum Mitee, to journalists in Abuja, also showed that the NNPC owed the Federation Account  a whopping  N1.3tn.

Further, the report showed that the corporation which is the custodian of the nation’s oil resources, received $4.48bn from the Nigerian Liquefied Natural Gas which it has yet to remit  to the Federation Account.

NNPC, it was also reported, engaged in foreign exchange scam by using exchange rates lower than what was obtainable  at the Central Bank of Nigeria in its transactions. The scam led to the loss of N98.3bn by the government  within the period of three years (2009 – 2011).

Similarly, operators in the oil and gas sector engaged in under reporting quantities they produced for the purpose of Petroleum Profit Tax assessment. This scam led to the loss of $2.65bn.

The report also showed that the unresolved difference between what the government received and what companies claimed they paid amounted to $68.4m

Another $311.85m represented cash flow to the Federation Account as claimed to have been paid by operators in the sector but the payments had not been confirmed in CBN statements.

The report indicated  that Nigeria made $143.5bn (about N22.35tn) from oil and gas operations  between 2009 and 2011. It also showed that the subsidy claims by the  NNPC grew astronomically within the three years covered by the report.

Mitee said, “The financial report clearly underlines that contrary to the practice where subsidy payments are claimed from the Petroleum Support Fund through the Petroleum Products and Pricing Regulatory Agency by the qualifying oil marketing companies,  the NNPC draws subsidy payments directly from domestic crude sales proceeds before remittances to the Federation Account.

“As a result, a sum of N1.4tn was claimed during the period by the NNPC as oil subsidy payments. Subsidy payments claimed by the NNPC increased by 110 per cent. For example, it rose from N198bn in 2009 to N416bn in 2010.

“In 2011 alone, it rose to N786bn. The increase between 2009 and 2011 alone was 186 per cent. The physical and process audit expected to be released in March is currently carrying out further validations on subsidy payment transactions to include other marketers.

“Another important revelation of the report is that financial flows from the  NLNG include dividends and repayment of loans of which an amount of $4.84bn was received by  the NNPC.

“The report confirmed that these amounts have not been remitted neither to the CBN/NNPC JP Morgan Account nor the Federation Account.

“Furthermore, the report observes that this has been a recurring issue as an amount of $3.99bn was also reported as received but not remitted by the NNPC in the previous audits.

“The audit report also reveals that the  NNPC owes N1.31tn to the Federation Account as of December 31,  2011. This is a trade debt. This is because the sum of N928bn falls within the 90 days permissible period, leaving a balance of N377bn which the NNPC is currently paying by installment to the Federation Account.”

When contacted, NNPC’s General Manager, Media,  Dr. Omar Ibrahim, said  the corporation  had yet to see the report.

“We have not seen the report. When we see it,  we will study it and then respond. What we can assure Nigerians is that many of such reports had come out and they turned out to be false. A typical example is the Auditor-General’s report that was released last year,” he said.

The total fund accruing to the nation, according to the report, came through proceeds from the sales of equity crude, royalty, signature bonus, concession rentals, gas flaring penalties, PPT and companies income tax.

Mitee said, “A breakdown of these earnings shows that sales of crude oil and gas within the period under review amounted to $81.9bn. The total sum of revenues that accrued to government from PPT, royalty, signature bonus, gas flaring penalties and concessional rentals amounted to $45.7bn; revenue from companies income tax, value added tax and withholding tax within the period amounted to $6.1bn, while the sum of $4.8bn was reported as revenue from dividends and repayment of loans by the  NLNG.

“The total cash flow to states arising from withholding tax and PAYE was $1.5bn while the total cash flow to other entities arising from the contributions to Niger Delta Development Commission and education tax was $3.2bn.

“The total financial flow represents a decrease of four per cent from what government earned in the sector in 2006 to  2008 when compared to total flow of $148.8bn as against the reported government earnings of $143.5bn for 2009 – 2011.”

Mitee explained that the decrease was largely due to adjustments in the applicable average oil price despite fairly consistent production volumes.

Mitee said from the alleged scam of under reporting that led to under assessment of $2.65bn, a total of $442m had been recovered while some operators affected in the allegation were threatening legal actions.

He also disclosed that some companies refused to collaborate with NEITI and its auditors in the process of compiling the report.

The companies include NECONDE Energy Limited, SEPTA Energy Limited, Energia Limited and Emerald Energy Resources.

The NEITI chairman said the organisation would impose appropriate sanctions on  the companies in accordance with its ( NEITI ) enabling Act.

The report said there was a need to confirm the ownership of the 49 per cent investments in  the  NLNG – whether it was for the benefit of the federation, the Federal Government, or  the NNPC.

It called on the Federal Government to consider reviewing the daily allocation of 445,000 barrels per day to the level of available local refining capacity to avoid the gap process.

The report said, “Domestic crude oil sale proceeds should be paid to  the CBN in the currency of sales, where it should be converted at the appropriate rate by the apex bank  and  then  moved into  the Federation Account. This is to forestall the exchange rate shortfalls.

“NNPC should promptly pay its debt to the federation. The Federal Government should review the deduction of subsidy claims from the proceeds of domestic crude by NNPC to align them with due process like other marketers who draw their subsidy claims from PSF.

“All revenues accruing to the Federation Account should be subject to provisions of the appropriation act and in accordance with the constitution. The CBN, the Federal Inland Revenue Service, and the Office of the Accountant-General of the Federation should meet and reconcile these payments. To avoid recurrence, regular reconciliation exercise should be carried out within the year of transaction.”

It added that the NNPC should disclose all contingent liabilities in its financial statements to promote transparency and accountability, especially on alternative financing arrangements.

Ribadu asks 19 Northern governors to account for N8.3trillion revenue

Bassey Udo

Published: January 27,2013

The former Chairman of the Special Task Force on Petroleum Revenue, Nuhu Ribadu, on Saturday in Kano challenged the 19 northern governors to account for the N8.3 trillion that accrued to their states between 1999 and 2010.

Mr. Ribadu, who was speaking at a two-day summit of Northern Development Focus Initiative, NDFI, lamented that there were no significant achievements on ground to show for the huge resources at the state and local government levels for the period.

According to the former Chairman of the Economic and Financial Crimes Commission, EFCC, despite the fact that each of the 414 local governments in the north currently has budget in excess of the N8.3 trillion of the entire Northern Region under the late Sardauna of Sokoto, Ahmadu Bello, successive administrations in the region have failed to meet the expectations of the people.

He blamed corruption for the problem, noting that at least 90 per cent of the nation’s resources were being stolen by public officials.

“When Major Nzeogwu made his speech to justify the takeover of power on January 15th, 1966, he mentioned that the military took over because the first republic politicians were collecting ten percent bribes. But nonetheless, it presupposes that at least they were using 90 percent of the resources to do the work. It would be great to pose the question: ‘What is happening now’?, he asked.

He said today public officials steal 90 percent of funds allocated to their agencies while allowing 10 percent for the purpose for which the funds were earmarked.

Others, he said, out rightly loot the treasury, stealing directly from source as revenues accrue to their governments or agencies.

Mr. Ribadu recalled the statement credited to the UK Prime Minister, David Cameron, at the ongoing World Economic Forum in Davos, that the revenue received by Nigeria in 2012 from the sale of crude oil was more than the yearly aid the entire sub Saharan Africa received.

“Where is the money, where is the improvement?” he asked

The former EFCC chairman decried the under-development of the North and erosion of the legacies of the late Premier of Northern Nigeria, Ahmadu Bello.

According to him, the last annual budget by the late Sardauna for the whole north was just 44 million pounds, with Northern Nigeria, which Ahmadu Bello led at independence, now 19 states, the federal capital territory, Abuja and 414 local government areas.

These 19 states and over 400 local government areas, he said, got a total of N8.3 trillion from the federation account between 1999 and 2010.

He said every local government areas has budgets per annum that is more than the budget of the entire old northern region during the Sardauna era.

“My take is that they were not corrupt and that was the reason they achieved so much with so little. What is really happening now with all these huge sums we have?

“These local government areas do not even repair township drainages. They do not maintain existing markets and motor parks amongst many other things that would take a while to mention. Nobody knows what they generate as revenue internally, because all the sums quoted in the reports and newspapers are just what they get from the federation account monthly. They hardly meet in council except when there are subventions to be shared.

To make matters worse, he said,  many legislators, especially from the northern states, hardly attend sittings to defend the interests of their constituents, adding ” are mostly busy traveling to various parts of the world with their new found wealth”.

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FG, states, LGAs shared N8.8trn in 2012

By Vanguard of Nigeria Reporters
LAGOS — THE sum of N8.8 trillion was disbursed to the three tiers of government from the Federation Account between January and December 2012 from the statutory and Value Added Tax, VAT, allocations. The receipt came mostly from oil revenue, customs duties and VAT.

According to a table compiled by Economic Confidential, this amount excludes other allocations that were occasionally made to the states from the excess crude account, domestic crude account, SURE-P, NNPC refund and foreign exchange differentials. It also excludes states and councils’ internally generated revenue.

This came as outrage trailed the squandering of N80 trillion by the three tiers of government between 2005 and 2013 going by their budget appropriations and allocations to the local councils.

A careful scrutiny of the N8.8 trillion disbursements showed that the states can be conveniently categorized into the ‘boys and men’s clubs’ with a few of the states taking hundreds of billions, others taking a little less and the majority going home with ‘paltry’ amounts.

Akwa Ibom State appears to be the ‘king of boys’, coasting home with a princely N217 billion followed by Rivers which received N177 billion and Lagos N168 billion in the 12 months of 2012. States like Ebonyi (N45 billion), Gombe (N48 billion) and Nas arawa (N49billion) emerged as the poorest states. The allocation to the states included the share of their respective local government councils which they cornered since almost all the funds to the councils are controlled by governors who determine the administrators at the third tier of government.

The disparity in the allocations to the states came as a result of the indices developed by the Revenue Mobilisation, Allocation and Fiscal Commission, RMAFC, upon which the monthly disbursements are made by the Federation Accounts Allocation Committee, FAAC, chaired by the Minister of State for Finance. The indices include population, land mass, derivation, equality, internally generated revenue and other social development factors like school enrolment, hospital beds and road networks.

Outrage greets squandering of N80trn

Director, League for Human Rights, Jos, Mr. Nankin Bagudu, said it was sad that after spending such a huge sum, most of the citizenry were still swimming in poverty.

He said: “If the figures are correct, then they are mind-blowing. There is no way we can spend such huge amount and remain how and where we are today. The challenge then is not the lack of money but using it prudently and creatively.”

First civilian Governor of Edo State, Chief John Odigie-Oyegun spoke in like manner, lamenting that the three tiers of government had not provided the much-sought democracy dividends to Nigerians.

His words: “Only a few states are beginning to show that they are trying to put in place democratic dividends for their people. But for the Federal Government, it has not been a success story on the use of its share of the resources to provide democracy dividends for the people. We always raise issues in this country, but we never follow up. So, we always give them the licence to do what they like. It is a sad commentary and one day, the people will rise either with their votes or something. All these nonsense will stop.”

On his part, Minority Whip in the House of Representatives, Mr. Samson Osagie, while noting that N80trillion allocation also included funds for personnel cost, however, agreed that not much had been achieved in the provision of democracy dividends to Nigerians in the last nine years.

He said: “I agreed with the principle that not much has been achieved in terms of development. This has been underpinned by corruption cases by the various individuals and people that have managed the resources in the last nine years. Virtually, all the resource managers, since 2007, are facing one form of corruption charges or the other. We also run an expensive government and bureaucracy and that has affected our level of spending in the country.”

It has not impacted positively on Nigerians

 Chairman, Board of Trustees of International Society for Civil Liberties and the Rule of Law, INTERSOCIETY, said the N80 trillion spent by the three tiers of government in the past nine years had not impacted on the lives of majority of Nigerians.

Speaking with Vanguard in Onitsha, Umeagbalasi regretted that the chunk of the money was borrowed from local and foreign creditors, adding that even as the country’s debt profile continues to rise, the people have continued to wallow in abject poverty.

He said: “This staggering amount ought to have boosted the infrastructure in the country, including power, but the reverse is the case. Every year, Nigerians are given reasons for non-functioning of basic things of life in spite of the enormous resources the country has.

Relatedly, Bauchi State Chairman of the Action Congress of Nigeria, ACN, Alhaji Bappa Mohammed Dafida, regretted that the N80 trillion was not channelled towards laudable projects that would change the lives of the masses.

According to him, “N80 trillion in nine years is more than enough to take Nigeria out of the woods. But up till now, there is still abject poverty among the people. The question is: Can the federal, state and local governments actually account for the money allocated to them?”

Also, Adamawa State Chairman of the Congress for Progressive Change, CPC Alhaji Ibrahim Waziri, said he would not be surprised if 60  to 70 per cent of the N80 trillion went into private pockets as there is nothing on ground to show that such amount was spent on developmental projects.

FG, 36 states shared N8.8trillion in 2012 •Akwa Ibom (N217,776,188,886.07) •Osun (N72,200,789,928.64)

•Lagos (N168,688,367,207) •Ogun (N68,975,959,765.69) •Oyo (N93,524,683,879.60) •Kwara (N52,393,463,610.54)

Facts have emerged that a total of N8.8 trillion accrued to the three tiers of government from the Federation Account between January and December 2012 from the statutory and VAT allocations.

According to a report by an authoritative online medium, Economic Confidential magazine, this amount is exclusive of other allocations such as derivation (for oil-producing states), excess crude account, domestic crude account, subsidy reinvestment programme (SURE-P), Nigerian National Petroleum Corporation refund and foreign exchange differentials.

From statistics provided by the medium, South-South states received the highest allocations, with Akwa-Ibom receiving N217,776,188,886.07, followed by Rivers State which received N177,488,261,117.17. Bayelsa State got N115,743,144,031.67;  Delta State got a total of N156,052,071,645.19, while Edo State got N68,169,040,433.24. Cross River State N63,894,575,941.74

Lagos State in the Southwest got a total of N168,688,367,207.00 (the highest in the region), followed by Oyo State, which received a total of N93,524,683,879.60. Other states in the region: Ondo, got N78,416,358,272.47 (apart from 13 per cent derivation funds); Osun, N72,200,789,928.64; Ogun, N68,975,959,765.69 and Ekiti, N50,303,046,508.

In the North-Central, Niger State got the highest, with a total allocation of N79,747,942,955.64, followed by Benue State, which got N74,603,841,100.92. Plateau got a total of N59,990,295,696.88; Kogi N70,564,808,263.64; Kwara N52,393,463,610.54  and Nassarawa, N49,262,377,875.93; FCT, N19,130,584,542.15.

Allocations to the five South-East states are as follows: Abia, N63,964,695,387.15; Anambra, N71,968,922,762.11; Enugu, N62,548,484,175.02; Ebonyi, N45,335,956,658.49 and Imo N77,410,109,305.85.

In Northwest, Sokoto State received N74,313,032,890.28; Kebbi, N63,796,638,658.10;  Kaduna, N81,046,716,051.44; Kano, N130,005,314,633.13; Katsina, N96,823,335,677.90; Zamfara, N58,718,959,085.4 and Jigawa N81,595,023,492.97.

Borno State in the Northeast received N86,937,123,465.06; Taraba State, N64,934,346,702.87; Yobe, N63,558,436,853.11; Adamawa, N69,270,963,933.11; Bauch, N78,754,834,467.25 and Gombe, N48,750,924,392.47.

The Federal Government got a whopping N2,430,374,155,844.59

Although the figures include allocations to the 774 local governments, they were not separated from those of the states because a common practice in almost all the states is the lack of fiscal freedom for the councils. “The states help the local governments to spend their money” was how a financial analyst put it during the week.

The online medium also noted that the disparity in the allocations to the states came as a result of the indices developed by the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), upon which the monthly disbursements are made by the Federation Accounts Allocation Committee (FAAC) chaired by the Minister of State for Finance.

The indices include population, land mass, derivation, equality, internally generated revenue and other social development factors like school enrolment, hospital beds and road networks.

Ezekwesili: Yar'Adua, Jonathan Frittered $67bn Obasanjo Left

Dr. Oby Ezekwesili,

Davidson Iriekpen
A former Minister of Education in the Olusegun Obasanjo administration, Dr. Oby Ezekwesili, has stated that the squandering of $45 billion in foreign reserves and $22 billion in the Excess Crude Account (ECA) by the Yar’Adua-Jonathan administration is “the most egregious” instance of Nigeria’s failure to make the right developmental choices.

Ezekwesili, also a former vice-president (Africa) at the World Bank, stated Thursday at the convocation lecture of the University of Nigeria, Nsukka (UNN) that Nigerians had lost dignity because of the ravaging poverty arising from poor choices of the elite, corruption and lack of investment in education.

Noting that Nigeria had enjoyed five cycles of oil boom, she decried the failure to convert oil income to renewable assets through the development of human capital, development of other sectors or investment in foreign assets as other resource-rich countries have done with their oil income.

Ezekwesili, a founding director of Transparency International (TI), asserted, “The present cycle of boom of the current decade is much more vexing than the other four that happened in the 70s, 80s, 90s and 2000s.

“This is because we are still caught up in it and it is more egregious than the other periods in revealing that we learned absolutely nothing from the previous massive failures.”

She lamented the “squandering of the significant sum of $45 billion in foreign reserves and another $22 billion in the Excess Crude Account, being direct savings from increased earnings from oil that the Obasanjo administration handed over to the successor government in 2007”.

She stated: “Six years after the administration I served handed over such humongous national wealth to another one, most Nigerians but especially the poor continue to suffer the effects of failing public health and education systems as well as decrepit infrastructure and battered institutions.”

She queried: “One cannot but ask what exactly symbolises this level of brazen misappropriation of public resources? Where did all that money go?

“Where is the accountability for the use of both these resources and the additional several hundred of dollars realised from oil sales by the two administrations that have governed our nation in the last five years?
“How were these resources applied or more appropriately misapplied? Tragic choices.”

Ezekwesili advised the graduating students of UNN and other educated young people to become the turning point generation of young and educated Nigerians willing to make the right choices by serving or having a say in political affairs of the country.

She said that sorting out the “Nigerian political mess” is critical as there is a strong correlation between politics and economic development.

According to her, university graduates account for 4.3 per cent of Nigeria’s youthful population in 2013, a slight increase from the 3 per cent when she graduated in 1985.

“This compares unfavourably with opportunities for university education in other countries put at 37.5 per cent in Chile, 33.7 per cent in Singapore, 28.2 per cent for Malaysia and 16.5 per cent for Brazil,” she said.

Ezekwesili linked Nigeria’s poor capital formation to the low development of its people through education.
“Our lag in tertiary education enrolment is quite revealing and could be interpreted as the basis of the competitiveness gap between the same set of countries and Nigeria.

“The countries with the most highly educated citizens are also some of the wealthiest in the world, revealed a study by the OECD published by the Wall Street Journal last year,” she observed.
She posited that it was up to the younger generation to restore the dignity of Nigeria by making the right choices to lift the nation out of poverty.

She also described Nigeria as “a paradox of the kind of wealth that breeds penury,” noting “the trend of Nigeria’s population in poverty since 1980 to 2010 suggests that the more we earned from oil, the larger the population of poor citizens.”
The figures of the poor in Nigeria grew from 17.1 million in 1980, 34.5 million in 1985, 39.2 million in 1992, 67.1 million in 1996, to 68.7 million in 2004 and 112.47 million in 2010, she said.

Ezekwesili espoused a new vision for Nigeria couched simply as “we believe in dignity”.  She said the resurgence of entrepreneurial spirit based on hard work and sound education were critical factors to changing Nigeria.
“For Nigeria’s dignity to be restored, your generation must build a coalition of young entrepreneurial minds that are ready to ask and respond to the question: What does it take for nations to become rich?

“Throughout economic history, the factors that determine which nations became rich and improved the standard of living of their citizens read like a Dignity Treatise in that they all revolve around the choices that ordinary citizens made in defining the value constructs of their nation,” she said.

The 42nd convocation ceremony of the UNN commenced yesterday with the convocation lecture and the Prize and Awards night for distinguished graduands.

First degree holders, numbering 18,150, would receive their certificates today, while higher degrees and honorary awards would be awarded tomorrow and conferred on 1,730 recipients.

Tags: ECA, Featured, Frittered $67bn Obasanjo Left, News, Nigeria, UNN

Five Fresh Human Heads Found in Fulani Representative’s House

Commissioner of Information, Mr. Abraham Yiljap

By Seriki Adinoyi

A Shocking find of five fresh human heads has been made in the residence of former Special Adviser to the immediate past Chairman of Mangu local government area of Plateau State, Alhaji Saleh Abershi, who is also a representative of the Fulani in Mangun ward.

Different versions of the story have it that Abershi was a Boko Haram accomplice who tip off was given on before he was swooped on by security agents while another version has it that an arrest of a Boko Haram suspect who allegedly mentioned his name led to special agents from Abuja storming his residence where the human heads were found.

It was gathered that following a security tip off, over five hilux vans conveyed security men all the way from Abuja to raid his residence. Saleh was subsequently arrested and whisked to Abuja.

Another version said it was in the process of interrogating a Boko Haram sect suspect in Abuja that Saleh was mentioned as an accomplice leading to the deployment of the security personnel for his arrest.

Confirming the incident, the current Chairman of Mangu local government, Isah Shikben described the incident as revealing, urging residents to remain calm and allow security operatives do their jobs.

Meanwhile, Plateau State Government has condemned the recent resurgence of violent attacks in some parts of the state “just when the state had been enjoying steady peace for some time”, describing it as unprovoked, and deliberately aimed at plunging the State into larger and perpetual theatre of conflict.

In a statement by the Commissioner of Information, Mr. Abraham Yiljap, the state said the recent attacks have resulted in the loss of many lives especially, and caused pain among the people.

The statement added that “the latest attacks in some parts of Jos South, Barkin Ladi and Wase Local Government Areas appear deliberately aimed at plunging the State into larger and perpetual theatre of conflict.”
The state however said it is in consultation with security agencies to adopt various measures to stop it from spreading.

“Government has also directed Local Government Management Committee Chairmen of the affected areas to adopt specific pro-active measures to douse tension and maintain the peace of the areas.

Tags: Featured, News, Nigeria, HUMAN HEADS, Fulani, REPRESENTATIVE

Nigeria Asks Foreign Countries To Warn Citizens Over Illegal Oil Bunkering

FRIDAY, 25 JANUARY 2013 20:10 FROM BOLA OLAJUWON, ADDIS ABABA, ETHIOPIA NEWS - NATIONAL

NIGERIA has appealed to foreign countries to enlighten their citizens on the implication of engaging in illegal oil bunkering in any part of the country.

Ashiru, who revealed this after a meeting with a delegation of United Kingdom’s (UK) government at the ongoing 22nd Ordinary Session of African Union, asserted that most of the ships arrested for crude oil bunkering in the past belong to foreigners, arguing that if there is no willing foreign buyer, there won’t be a seller.

The minister, therefore, asked the delegation and by extension, other foreign governments to dissuade their citizens from engaging in oil bunkering in Nigeria.

He said he informed the delegation that he would not be in a position to help if any of their citizens is caught by Nigerian security forces.

Ashiru added that his appeal is coming after a similar warning to accredited diplomats in Nigeria during a meeting he had with them about two weeks ago.

He added that with this warning, any foreigner caught for bunkering would automatically face the Nigerian court process.

However, the practice of illegal hacking into pipelines to steal crude, then refining it or selling it abroad is now common in Nigeria.

Flooding and large-scale theft of crude drove Nigerian oil output to the lowest level for more than two years in October, the International Energy Agency (IEA) said recently, highlighting challenges facing Africa’s biggest producer.

Oil production in Nigeria fell to 1.95 million barrels per day in October, the agency said a report, with production in recent months having ranged between 2.0 and 2.5 mbd.

The drop from September to October last year was around 110,000 barrels per day, it said, leaving Nigerian production at “the lowest level in around two and half years.”

It said: “By early November, production levels were recovering, with export schedules showing increased volumes for December.”

It was enough to keep Nigeria as Africa’s top producer ahead of Angola at 1.79 million barrels per day, but the drop came amid growing warnings that the country must take action to avoid stagnant output in the future.

The IEA report cited heavy flooding, which hit Nigerian production during rainy season as well as the continuing problem of large-scale and organised oil theft in the continent’s most populous nation.

The Ghanaian woman who made millions fighting skin-bleaching

African Dream: Ghana's Grace Amey-Obeng

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African Dream

• Great strides
• Nigeria's low-cost tablet computer
• Galloping to success
• Changing of the guards

Ghana's Grace Amey-Obeng, one of West Africa's most successful businesswomen, made her fortune promoting products which emphasised the beauty of the black skin, at a time when many of her competitors were selling dangerous skin-bleaching formulas.

The business empire she started a quarter of a century ago with around $100 (£63) now has an annual turnover of between $8m and $10m.

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“Start Quote

The women in the market had destroyed their skin with all this kind of beauty products, bleaching products”

Grace Amey-Obeng

Her FC Group of Companies - which includes a beauty clinic, a firm that supplies salon equipment and cosmetics, and a college - has eight branches in Ghana and exports to Nigeria, Burkina Faso, Togo, Ivory Coast, Switzerland and the United Kingdom.

Mrs Amey-Obeng has won dozens of accolades and industry awards for her skincare beauty products and marketing.

But one of the things that make her especially proud is her FC Beauty College which, since its opening in 1999, has trained more than 5,000 young people, mostly women.

"It's like a family bond. I'm so proud that they have managed to go through the programme," she told the BBC's series African Dream.

Equally important to her is her role as a medical aesthetician and she cites seeing a skin condition resolved as something that gives her "joy".

"I'm so happy that God has given me that talent and that touch to heal people," she said.

'Irreparable damage'

Mrs Amey-Obeng studied beauty therapy in the United Kingdom and after graduation, in the 1980s, returned to her native Ghana.

Continue reading the main story

Grace Amey-Obeng

• Age: 55
• Studied Beauty Therapy at Croydon College, London, UK
• CEO FC Group of Companies
• Annual turnover: $8-10 million
• Start-up capital: $100
• Number of employees: 95
• Exports to: Nigeria, Burkina Faso, Togo, Ivory Coast, UK, Switzerland
• Branches in Ghana: Eight
• Trainees: 286 currently in hairdressing/beauty therapy
• Hobbies: Collecting African art

She knew that in her country women take great pride in their appearance and was convinced that there was a niche market she could "tap into".

Working out of her bag and going from house to house she advised people on skincare.

Soon, however, she became aware that there was "a lot of skin-bleaching going on", a trend she found "alarming" and something that is common in much of Africa.

"The women in the market had destroyed their skin with all this kind of beauty products, bleaching products, and so I saw the need for assisting them to reverse the process because otherwise it would become a social problem," she said.

"The level of damage - in this climate - bleaching does is irreparable," she added.

Not long after her return to Ghana, she opened her first beauty clinic with financial support from her family.

"I couldn't access any funds from the bank. I didn't even think about it because everybody said 'In this country nobody will give you money'".

Business loan offers came pouring in only after her business had been running for three years.

Although access to bank loans in Ghana might be relatively easier these days, she advises that budding entrepreneurs should take care not to borrow too much.

Made in Ghana

Mrs Amey-Obeng explained that, once her clinic was running, she realised that the imported products they were recommending often proved too expensive for their clients.

Since its opening, the FC Beauty College has trained more than 5,000 young people

This was often a result of currency exchange rate fluctuations.

"It was a challenge. They would come back with worse conditions, and so we said: 'OK, why don't we start our own line that we can sell to our people?'".

Her skincare line, which she started in 1998, would soon have a huge success not only because of the products' prices - which currently range from $3 to $15 - but also, in her opinion, because they were made taking into account black skins and the West African climate.

In view of her concerns about skin bleaching, the name of her brand, Forever Clair (Clear), may seem controversial to some.

However, she argues that "clair" there refers to "light, hope and strength", not skin colour.

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“Start Quote

The joy of putting smiles on the faces of people that this business offers, that's what makes me want to do it forever”

"Light shows the way. It's not about complexion, it's about the heart," the entrepreneur said.

And she seems indeed bent on helping others to gain hope and strength. She is well-known in Ghana for her philanthropic work, especially through the Grace Amey-Obeng International Foundation.

Women leaders, she says, should offer a helping hand to less fortunate women, encourage them and share expertise.

"The joy of putting smiles on the faces of people that this business offers, that's what makes me want to do it forever."

African Dream is broadcast on the BBC Focus on Africa radio programme every Thursday afternoon, and on BBC World News throughout the day on Fridays

Every week, one successful business man or woman will explain how they started off and what others could learn from them.

Yar’Adua, Jonathan squandered N10.6trn

By Tony Edike & Chinenye Ozoh
ENUGU— FORMER Vice President (Africa) at the World Bank and Minister under former President Olusegun Obasanjo’s administration, Dr. Oby Ezekwesili, yesterday said that both the late President Umaru Yar’Adua and his successor, Goodluck Jonathan’s regimes ‘’squandered’’ $67 billion (about N11 trillion) oil money left in two separate accounts by Obasanjo.

Ezekwesili said that the two administrations squandered $45 billion (N7.065 trillion)  left in the Foreign Reserve and another $22 billion (about N3.454 trillion) left in the  Excess Crude Account, bringing the total amount of money squandered to about $67 billion or N10.619 trillion.

President Goodluck Jonathan and late president, Alhaji Umaru Musa Yar’Adua

Ezekwesili spoke while delivering the Convocation Lecture of the University of Nigeria, Nsukka, UNN. She noted that Nigerians had lost dignity because of ravaging poverty arising from poor choices of the elite, corruption and lack of investment in education.

Recalling that Nigeria had enjoyed five cycles of oil boom since independence,  Ezekwesili decried the failure by the leadership to convert oil income to renewable assets through the development of human capital and other sectors through investment in foreign assets as other resource-rich countries did with their oil income.

Her words: “The present cycle of boom of the 2010s is, however, much more vexing than the other four that happened in the 70s, 80s, 90s and 2000s. This is because we are still caught up in it and it is more egregious than the other periods in revealing that we learned absolutely nothing from the previous massive failures.

Nigeria learnt nothing from past failures

“This is because we are still caught up in it and it is more egregious than the other periods in revealing that we learned absolutely nothing from the previous massive failures.”

The former minister lamented “the squandering of the significant sum of $45billion in foreign reserve account and another $22billion in Excess Crude Account being direct savings from increased earnings from oil that the Obasanjo administration handed over to the successor government in 2007.

“Six years after the administration I served handed over such humongous national wealth to another one most Nigerians but especially the poor continue to suffer the effects of failing public health and education systems as well as decrepit infrastructure and battered institutions.

“One cannot but ask what exactly does this level of brazen misappropriation of public resources symbolize? Where did all that money go? Where is the accountability for the use of these resources and the additional several hundred dollars realized from oil sale by the two administrations that have governed our nation in the last five years? How were these resources applied or more appropriately misapplied? Tragic choices.”

Ezekwesili, who was a founding director of Transparency International and also, former Minister of Solid Minerals and later Education however, asked graduating students of UNN and other educated young people to become the Turning Point generation of young and educated Nigerians willing to make the right choices by serving or having a say in political affairs of the country.

She stressed that sorting out the “Nigerian political mess” is critical as there is a strong correlation between politics and economic development.

According to her, university graduates accounted for 4.3% of Nigeria’s youthful population in 2013, a slight increase from the 3% when she graduated in 1985. She pointed out that this figure compared unfavourably with opportunity for university education in other countries put at 37.5% in Chile, 33.7% for Singapore, 28.2% for Malaysia and 16.5% in Brazil.

Education and development

Ezekwesili linked Nigeria’s poor capital formation to the low development of its people through education. “Our lag in tertiary education enrolment is quite revealing and could be interpreted as the basis of the competitiveness gap between the same set of countries and Nigeria. The countries with the most highly educated citizens are also some of the wealthiest in the world in a study by the OECD published by the Wall Street Journal last year.”

The former Minister added: “The appropriate response to the revenue extracted from our oil over the period 1959 to date would have been to use it in accumulating productive investment in the form of globally competitive human capital and physical asset of all types of infrastructure and institutions. Such translation from one form of non-renewable asset to renewable capital would have been the right replacement strategy for a wasting asset like oil. Unfortunately, unbridled profligacy has made us spend and continue to spend the free money from oil like a tragic Rentier state that we are called in development circles.

“Resource wealth has tragically reduced your nation –my nation – to a mere parable of prodigality,” stressing that “Nothing undignifies nations and their citizens like self-inflicted failure. Our abundance of oil, people and geography should have worked favourably and placed us on the top echelons of the global economic ladder by now.”

She said that it was up to the younger generation to restore the dignity of Nigeria by making the right choices to lift the nation out of poverty.

Furthermore, describing Nigeria as “a paradox of the kind of wealth that breeds penury,” the former World Bank Executive said “the trend of Nigeria’s population in poverty since 1980 to 2010 suggests that the more we earned from oil the larger the population of poor citizens.”

How poverty rages higher

According to her, the figures of the poor in Nigeria grew from 17.1million in 1980, 34.5million in 1985, 39.2million in 1992, 67.1million in 1996, to 68.7million in 2004 and 112.47million in 2010.

Ezekwesili advocated a new vision for Nigeria,  expressed simply as “we believe in dignity,” pointing out that the resurgence of entrepreneurial spirit based on hard work and sound education were critical factors to changing Nigeria.

“For Nigeria’s dignity to be restored your generation must build a coalition of young entrepreneurial minds that are ready to ask and respond to the question. What does it take for nations to become rich? Throughout economic history, the factors that determine which nations became rich and improved the standard of living of their citizens read like a Dignity Treatise in that they all revolve around the choices that ordinary citizens made in defining the value constructs of their nation”.

The 42nd Convocation ceremonies of the UNN commenced, yesterday, with the Convocation Lecture and the Prize and Awards night for distinguished graduands.
About 18,150 first degree holders would receive their certificates today, while higher degrees and honorary awards would be celebrated tomorrow and conferred on 1, 730 recipients. There are 116 First Class Honours recipients while 195 will receive Doctorate degrees.