The Central Bank of Nigeria (CBN) Governor, Mallam Lamido Sanusi, has warned that oil theft would cripple the nation’s economy.
Sanusi, who was speaking on the First National Risk Management Conference in Lagos recently, said oil theft was creating heavy leakage on the economy, warning that if the trend continued, it would affect the oil sector’s contribution to the Gross Domestic Product (GDP).
He pointed out that oil theft had become an organised crime run by barons, stressing that the present development went beyond pipeline vandalisation.
“Oil theft is becoming worrisome. The perpetrators of this criminal act are barons who are bent on sabotaging the economy. This definitely will slow down savings and government revenue,” he said.
It will be recalled that the Nigeria National Petroleum Corporation (NNPC) reported a drop in crude oil production in the first quarter of 2013, January to March, which caused Nigeria a loss of crude revenue of about $1.23 billion (N190 billion)
The corporation attributed it to crude oil theft and vandalism along the major pipelines within the Niger Delta.
The NNPC projected that the nefarious activities would reduce April and May monthly average to about 2.2 mbpd and further decrease crude oil revenue by about $554 million (N83 billion) that should have accrued to the federation account.
In his keynote address at the conference, Sanusi said there was need to strengthen risk management in the various financial institutions, regretting that many boards and senior managers had limited knowledge and experience in managing risks.
“Across board, risk management systems were often inadequately designed and the information required to make sound decisions were either totally unavailable, or buried under a plethora of irrelevant data,” he said.
He urged the participants to examine the risk posed by the rising flow of hot money into the financial system and the impact of the coming elections on the inflows, stating that it would also impact on the interest rate.