“How Nigeria Lost $450M to Subsidy Fraud,” Ex-EFCC Boss Bawa Speaks

• Former EFCC chairman, Abdulrasheed Bawa, has revealed that Nigeria lost over $450 million to subsidy fraud under the Petroleum Support Fund (PSF) scheme between 2006 and 2012
• He made this revelation in his newly released book titled "The Shadow of Loot & Losses: Uncovering Nigeria’s Petroleum Subsidy Fraud"
• Bawa, who served as chairman from February 2021 to June 2023, exposed the systemic corruption within the subsidy scheme and its devastating impact on Nigeria’s economy

Legit.ng journalist Esther Odili has over two years of experience covering political parties and movements.

The former chairman of the Economic and Financial Crimes Commission (EFCC), Abdulrasheed Bawa, has stated that over $450m was lost to subsidy fraud under the Petroleum Support Fund scheme between 2006 and 2012.

In his new book, "The Shadow of Loot & Losses: Uncovering Nigeria’s Petroleum Subsidy Fraud," Bawa documents the massive fraud that marred the scheme.

The former EFCC boss said some of the indicted oil marketers were prosecuted and jailed, while 80 percent of the stolen funds have been recovered.

He added that Nigeria has spent over N16.5 trillion on petrol subsidy since the return of democracy in 1999.

“Our investigations revealed that, as admitted by the oil marketing companies involved, fraud related to petroleum subsidies exceeded N68 billion, which translates to over $450 million in direct fraudulent activities. This fraud involved 59 out of the 141 companies that participated in the PSF scheme from 2006 to 2011. We also uncovered fraudulent claims amounting to N19.6 billion on issues related to traders (sellers), of which the oil marketing companies denied knowing anything about,” Bawa wrote.

$450 million subsidy fraud: Its impact on Nigeria's economy

Bawa added that a “substantial portion of the expenditure” was linked to false claims and theft from the national treasury.

He said the fraudulent diversion of subsidised petroleum products to black markets and export channels resulted in significant fuel shortages, thereby contributing to inflationary pressures in the economy.

Bawa added that corruption and fraud within the petroleum subsidy system also deterred foreign investment, particularly in the downstream sector of the economy.

“Within seven years of the introduction of the Petroleum Support Fund (PSF) scheme, Nigeria disbursed a staggering total of approximately N5.755 trillion in subsidies. The breakdown of the payments made to Nigerian National Petroleum Corporation (NNPC) and other Oil Marketing Companies (OMC) reflects the scale and impact of the subsidy regime on the Nigerian economy during the period,” Bawa added.

Meanwhile, Legit.ng reported that in May 2023, President Bola Tinubu announced the removal of the fuel subsidy, although the step had further driven up hardship and mismanagement of public funds.

Read more on Abdulrasheed Bawa:

• DSS releases former EFCC chairman Abdulrasheed Bawa, video emerges
• Tears as former EFCC chairman Bawa loses mother, details emerge

2027 election: Group berates Bawa

Earlier, Legit.ng reported that a civil society group, the Citizens Forum for Transparency and Integrity (CFTI), accused Bawa of conspiring with opposition figures to undermine President Bola Tinubu’s administration ahead of the 2027 general elections.

The group claimed that Bawa held recent meetings in London with opposition leaders and "third force" actors, adding that the discussions allegedly centered on using his previous contacts within the EFCC to investigate four ministers in Tinubu’s cabinet.

Source: Legit.ng