Ex-EFCC Chairman Bawa Reveals Nigeria’s $450 Million Loss to Fuel Subsidy Fraud

Abdulrasheed Bawa, former Chairman of the Economic and Financial Crimes Commission (EFCC), has stated that Nigeria lost $450 million due to fraud in the Petroleum Support Fund (PSF) between 2006 and 2012.
According to reports, Bawa made the disclosure in his newly released book “The Shadow of Loot & Losses: Uncovering Nigeria’s Petroleum Subsidy Fraud,” which details the deep-rooted corruption that afflicted Nigeria’s petrol subsidy regime.
The former EFCC chairman, who led a special investigation team during his time, revealed that several oil marketers were found guilty and prosecuted.

Bawa estimated that Nigeria has spent about ₦16.5 trillion on petrol subsidies since the return to democracy in 1999.
He stated, “Our investigations revealed that, as admitted by the oil marketing companies involved, fraud related to petroleum subsidies exceeded N68 billion, equating to more than $450 million in direct fraudulent activities.” This fraud affected 59 of the 141 companies that participated in the PSF scheme between 2006 and 2011. Bawa reported uncovering bogus claims of ₦19.6 billion relating to dealers and sellers, which oil marketing companies denied knowing about.

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“Our investigation revealed an attempted fraud of N9.4 billion in which oil marketing companies fabricated documents to match revised dates on mother vessel bills of lading in order to secure larger subsidy payments. However, because to existing difficulties in the execution of the standards, these changed bill of lading dates were eventually not used.

“Interestingly, no infractions were recorded in 2006 or 2007. In 2008, 2009, and 2010, we discovered fraud involving ₦11.5 billion, ₦4.88 billion, and ₦10.3 billion, respectively. In 2011, we found ₦41.7 billion in illegal fuel subsidy activities, making it the top period. Fraudulent schemes totaled over ₦68 billion, with nearly 80% recovered. Unrecovered monies are related with lawsuits that are still pending in court or promoters who have died.

“These direct revenue losses, combined with many other unreported amounts and indirect revenue losses, could have been utilized to fund critical public services, infrastructure development, and social welfare initiatives. Unfortunately, the illegal drain on public funds has compounded the budgetary deficit, forcing budget cuts in important areas like as education, healthcare, and social welfare programs.

“Table 6.1 shows the financial records for subsidy payments under several regimes since Nigeria’s return to democracy in 1999. Nigeria has spent ₦16.5 trillion on subsidies over its 25-year democratic governance.

Bawa further stated that a “substantial portion of the expenditure” was related to bogus claims and theft from the public treasury.