Missing $20 Billion: Nigeria’s Finance Minister Okonjo-Iweala Launches Expensive Media Blitz To Douse International Criticism

Mar. 12, 2014

Unsettled by questions swirling around the world about Nigeria’s missing crude oil earnings as well as the overall management of the Nigerian economy, Finance Minister Ngozi Okonjo-Iweala has launched a major public relations campaign to save her reputation from ruin. Several sources disclosed that the minister wants to insure her political survival while sending signals to the international financial community that she is angry with those behind the scandal in the oil sector, specifically Petroleum Minister Diezani Alison-Madueke.

In the last three months, Nigeria has been the focus of international attention. Reporters, financial analysts and investors have raised concerns about the unresolved controversy over the billions of dollars of crude oil sales that the Nigerian National Petroleum Corporation (NNPC) reportedly did not remit with the Central Bank of Nigeria.

Suspended Central Bank Governor Sanusi Lamido Sanusi sent shock waves in the financial world when he told a panel of the National Assembly that the NNPC had yet to account for $20 billion of the country’s crude oil sales. As part of the missing funds, Mr. Sanusi, who was suspended from office two weeks ago, stated that more than $6 billion that should have accrued to Nigeria from a so-called strategic partnership agreement with private oil companies had apparently been siphoned into unknown private accounts.

While Petroleum Minister Diezani Alison-Madueke is the immediate focus of the missing funds as well as massive corruption in the oil sector, Ms. Okonjo-Iweala’s reputation as a solid economic manager has also taken a major hit. As a well known former top official of the World Bank, her failure to detect the anomalies in the massive scandal in the oil sector has been questioned. One source said many foreign admirers of Ms. Okonjo-Iweala’s image as an informed economic manager were wondering whether she was kept in the dark about the apparent theft of Nigeria’s oil funds or she had decided to stay silent about the issue for the sake of her political survival.

Such questions have rattled Ms. Okonjo-Iweala. She has recently relied heavily on the services of Mercury LLC, an image management firm that was hired by the Goodluck Jonathan government to manage the administration’s image. Our investigations revealed that the Jonathan administration paid the firm an initial fee of $150,000 after retaining the company in August 2013. The firm retains the right to charge the Nigerian government extra cost for assignments of this nature.

Ms. Okonjo –Iweala has used the foreign lobby and image management firm, which is a big player in Washington, DC and other places, in a big campaign to repair her own dented image as well as help fix the Jonathan administration’s image crisis.

The firm describes itself as “a high-stakes public strategy firm” whose “expertise comes from extensive must-win campaign experience.” The firm also boasts that “We know what it takes to win in difficult situations. We have proven results for prominent figures, leading advocacy groups and the world’s most successful companies.”

Ms. Okonjo-Iweala has privately complained that President Jonathan and Ms. Alison-Madueke have created unnecessary problems for her, causing her image to take a beating. But one of her critics asserts that the minister’s extensive use of the services of Mercury LLC suggests that she is in tune with the administration’s policies.

In the wake of Mr. Sanusi’s first allegation that Nigeria had lost close to $50 billion, the Finance Minister quickly initiated a tripartite meeting involving officials of the CBN and the Petroleum Ministry in order to “reconcile” discrepancies in crude oil revenue deposits. At the end of the first stage of the reconciliation process, Ms. Okonjo-Iweala announced that only $10.8 billion remained unaccounted for, even though Mr. Sanusi insisted that the figure was more than $12 billion. Some analysts have wondered why the Finance Minister has not been more forthcoming in explaining what happened to the $10.8 billion she admitted was yet to be reconciled.

A source close to Ms. Okonjo-Iweala told SaharaReporters that the minister felt she had been placed “in a difficult situation to explain missing money that she knows nothing about.” The source stated that the Finance Minister has complained to her close confidants that she was upset for being questioned over funds that Ms. Alison-Madueke, as Petroleum Minister, should be answering questions about. “If you look at it, Dr. Okonjo-Iweala has nothing to do with the missing money,” said the source. “Yet, the foreign media continues to direct their questions and criticism at her as if they mistake her for the Petroleum Minister. She thinks it is unfair.”

Another source said the image firm may have advised Ms. Okonjo-Iweala to take an aggressive line with the foreign media in addition to washing her hands clean of the scandal by backing an audit of the oil transactions. In February, the minister indicated her support for the audit option. Earlier today, President Jonathan stated that his government was open to the idea, but did not go as far as stating that his administration was in the process of engaging a reputable auditor.

One source said the Finance Minister realizes how that increasing international criticism, especially those questioning her management of Nigeria’s economy, have damaged the way she is perceived around the world. President Goodluck Jonathan’s decision to suspend Mr. Sanusi from the post of CBN Governor was an additional public relations nightmare for Ms. Okonjo-Iweala, said the source. “Again, she feels as if she was being blamed for the firing of Sanusi, even though she was not behind it. And there was nothing she could have done about it,” said the source.

In order to counteract the growing attacks in the foreign media, Ms. Okonjo-Iweala decided to come out of the shell and confront her critics. In a BBC interview with Will Ross yesterday, the minister came across as frustrated. Facing a barrage of tough questions from the reporter, the minister seemed to lose her cool as she implied that Mr. Sanusi was irresponsible in going public with the missing billions. She also claimed that her ministry was carrying out due diligence and had informed local governments as well as state governments in the past about shortfalls in the NNPC’s lodgments of crude oil revenues. A source said her harsh tone in the interview reflected her frustration that many foreign analysts were portraying her as inept in handling the issue of the missing billions. (The link to the interview is here: http://www.bbc.com/news/world-africa-26535530).

The minister also wrote an editorial opinion piece that will run in tomorrow’s edition of the Financial Times (FT). In the piece, titled “Recent setbacks will not undo Nigeria’s progress,” Ms. Okonjo-Iweala tried to play down the damage that arose from the scandal of the missing billions and the firing of Mr. Sanusi. She claimed that the fundamentals of the Nigerian economy remain solid. “Allegations of unremitted oil revenues, and leadership changes at the central bank, have attracted a great deal of the wrong kind of attention to Nigeria,” the minister wrote, adding, “Though there was consternation in the markets following the suspension of Lamido Sanusi, governor of the country’s central bank, a sense of normality is gradually returning.”  The paper’s online edition can be read here.

A source said the piece was part of the minister’s effort to douse the political heat that she and the Jonathan administration have faced. Even though the piece emphasizes the need for a “forensic” audit of the NNPC and oil revenues, her stronger contention that Nigeria’s economic future lies outside of the oil and gas sectors may be seen as a clever way of downplaying the necessity for a credible audit. The Jonathan administration is notoriously slow on issues of transparency.

A source in Abuja said the piece revealed Ms. Okonjo-Iweala trying to do a balancing act. On the one hand, she created the impression that the Nigerian economy has recovered fully from any instability caused by the outcry over the missing funds scandal and, on the other, she tried to make herself look focused on piloting Nigeria to greater economic heights.

In the last week, both the New York Times and the Financial Times have written reports or editorials critical of the financial goings-on in Nigeria, including how the suspension of Mr. Sanusi had shaken investor confidence in Nigeria.

The troubles for the administration as well as Ms. Okonjo-Iweala may be far from over. A source told SaharaReporters that suspended CBN Governor Sanusi earlier today submitted an “explosive” letter to President Jonathan. A source stated that Mr. Sanusi’s letter, which we could not obtain as at press time, was a response to recent government attacks on his credibility and service at the Central Bank.