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Claim: A viral statement purportedly by Finance Minister Wale Edun, quoted him as saying ex-president Muhammadu Buhari sold Nigeria’s crude oil two years upfront.
Verdict: Misleading. Current Plateau Governor Caleb Mutfwang made part of the viral statement.
Full Text
In recent months, President Bola Tinubu’s government has come under intense criticism over the harsh economic realities facing Nigerians. Citizens rankled by the development blamed the current government for their misfortune.
Those in government have attempted to exonerate themselves by blaming past administrations for Nigeria’s economic challenges.
Godwin Obaseki, the governor of Edo state, earlier claimed former President Muhammadu Buhari should be held responsible for the country’s economic misfortune, particularly the high inflation rate.
Obaseki argued that the Buhari-led government made some decisions that adversely affected the nation’s economy.
This narrative has also gained popularity on social media. Recently, a post that went viral on Facebook and Instagram was attributed to current Finance Minister, Wale Edun.
In the statement, the minister was quoted as saying Mr. Buhari allegedly sold Nigeria’s crude oil upfront for two years and collected the money but that he cannot be arrested because of party affiliation.
The post has been shared several times and referenced in news articles. Considering its significance, DUBAWA decided to investigate it.
Verification
A keyword search on Google showed that Mr Edun blamed the Buhari administration for the hyperinflation facing the country.
He said the economic crisis was a result of the N22.7tn printed by the Central Bank of Nigeria through Ways and Means overdraft for eight years under the immediate past administration. Mr Edun said the money was ‘printed aimlessly’.
However, there is no record or report of where Mr Edun said former president Buhari sold crude oil up front. Rather, the statement was made by the incumbent governor of Plateau State, Caleb Mutfwang.
In several news reports, Mr Mutfwang said the Bola Tinubu government inherited the worst performing economy from Buhari where “the crude oil we’re yet to take out of the ground has been sold in advance.”
The governor, who spoke during the swearing-in ceremony of 22 Special Advisers and heads of other government agencies appointed by his administration, in March 2024, said the past administration had sold the future of Nigeria.
“This government inherited an economy where we simply printed money up to the tune of N30 trillion and shared. This government inherited an economy where the crude oil we’re yet to take out of the ground has been sold in advance.
“So when you’re talking about the fall of the naira, it’s not rocket time. We sold our future under the last administration. No wonder you’re hearing of riots today, people intercepting food on the way. We are lucky on the plateau that perhaps we have more food than many other states,” he was quoted as saying.
In a rebuttal, however, the APC said it was normal in the oil business to sell for upward of 10 years and payments made upfront. The party also said this sort of transaction was not new.
Additionally, DUBAWA noted that the statement’s grammatical flaws suggest it could have been written by an average Nigerian. This pattern is not uncommon in purported statements that have been debunked in the past, as seen in these instances here, here, and here.
More explanation on selling crude oil upfront
In Aug 2023, NNPC Ltd announced that it had secured a $ 3 billion emergency crude repayment loan from AFREXIM bank to support the Federal Government in its policies aimed at stabilizing the exchange rate market.
In its Frequently Asked Questions (FAQ) segment, NNPC explained that Project Gazelle operates as such: a Special Purpose Vehicle (SPV) enters into a forward sale agreement with the seller (NNPC Limited).
The SPV further secures financing from a bank based on the agreed forward sale value of the crude oil. The collateral for this funding is the future crude oil itself.
The NNPC subsequently uses the funding from this sale to finance its operations while the SPV uses proceeds from the sales of the crude oil to meet its financial obligations with the bank and return any excess from the sales to the original seller (NNPC).
In an interview with Vanguard Newspaper, Femi Soneye, the NNPC’s Chief Corporate Communication Officer explained the importance of this arrangement, noting that it was to help provide dollar financing to the Federal Government.
He said, “It is a short to mid-term solution to the foreign exchange shortage challenge currently being faced by the country. Nigeria needs to urgently improve its foreign exchange position.
“As of June 2023, the Central Bank had over US$6 billion of unmet obligations – forward contracts with third-party institutions which were past their expiry dates. These unmet obligations have pressured the nation’s external reserves and resulted in a significant devaluation of the Naira.
“The pre-financing arrangement allows the Federal Government to receive foreign exchange, in advance, to enable it to resolve its unmet FX obligations. These inflows of foreign exchange will ensure exchange rate stability and is an immediate quick-win available to the country.”
More information can be seen here and here.
Conclusion
The viral statement attributed to Finance Minister Wale Edun is misleading, as there is no evidence that he made such a remark. Part of the said statement can be traced back to the current governor of Plateau State, Mr. Mutfwang.
