The man who blew open the corruption saga that rocked the
Nigerian National Petroleum Corporation (NNPC), Emir Muhammed Sanusi, has once
again reaffirmed that the NNPC failed to remit billions of dollars to the federation
account.
Sanusi explained this further in a piece he wrote for
Financial Times yesterday. Read his full write up after the cut.
Financial Times yesterday. Read his full write up after the cut.
Just over a year ago President Goodluck Jonathan suspended
me from my position as governor of the Central Bank of Nigeria after I
questioned an estimated $20bn shortfall in oil revenues due to the treasury
from the state oil company. As I said then, you can suspend a man, but you
cannot suspend the truth. The publication last month of a PwC audit into the
“missing billions” brings us a step closer to it.
me from my position as governor of the Central Bank of Nigeria after I
questioned an estimated $20bn shortfall in oil revenues due to the treasury
from the state oil company. As I said then, you can suspend a man, but you
cannot suspend the truth. The publication last month of a PwC audit into the
“missing billions” brings us a step closer to it.
When I was central bank governor I raised three broad
questions. First, did the Nigerian National Petroleum Corporation remit to the
government the entire proceeds of its crude oil sales? Second, if it did not,
is there proof of the purpose to which the unremitted amounts were applied? And
third, did NNPC have the legal authority to withhold these funds?
questions. First, did the Nigerian National Petroleum Corporation remit to the
government the entire proceeds of its crude oil sales? Second, if it did not,
is there proof of the purpose to which the unremitted amounts were applied? And
third, did NNPC have the legal authority to withhold these funds?
Contrary to the claims of petroleum minister Diezani
Alison-Madueke, the audit report does not exonerate the NNPC. It establishes
that the gap between the company’s oil revenues between January 2012 and July
2013 and cash remitted to the government for the same period was $18.5bn. And
it goes into detail about the NNPC’s account of how it used that money, which
raises serious questions about the legality of the state oil company’s conduct.
Alison-Madueke, the audit report does not exonerate the NNPC. It establishes
that the gap between the company’s oil revenues between January 2012 and July
2013 and cash remitted to the government for the same period was $18.5bn. And
it goes into detail about the NNPC’s account of how it used that money, which
raises serious questions about the legality of the state oil company’s conduct.
The auditors say a significant part of the unremitted funds
is supposed to have gone towards a kerosene subsidy that had been stopped two
and a half years earlier by the late President Umaru Yar’Adua. His decree never
appeared in the official gazette, leading some to question whether it ever had
legal force.
is supposed to have gone towards a kerosene subsidy that had been stopped two
and a half years earlier by the late President Umaru Yar’Adua. His decree never
appeared in the official gazette, leading some to question whether it ever had
legal force.
Evidence disclosed in the report suggests this is a
sideshow. The executive secretary of the agency charged with administering
subsidies confirmed that, acting on Yar’Adua’s orders, it had ceased granting
subsidies on kerosene. There was no appropriation for such a subsidy in the
2012 or 2013 budgets.
sideshow. The executive secretary of the agency charged with administering
subsidies confirmed that, acting on Yar’Adua’s orders, it had ceased granting
subsidies on kerosene. There was no appropriation for such a subsidy in the
2012 or 2013 budgets.
Throughout all this, Nigerians paid 120-140 naira a litre of
kerosene, far more than the supposed subsidised price of 50 naira. Yet the
state oil company withheld $3.4bn to pay for a subsidy that in effect did not
exist. I have consistently held that this was a scam that violated the
constitution and siphoned off money from the treasury.
kerosene, far more than the supposed subsidised price of 50 naira. Yet the
state oil company withheld $3.4bn to pay for a subsidy that in effect did not
exist. I have consistently held that this was a scam that violated the
constitution and siphoned off money from the treasury.
The second major item raised in the report relates to the transfer
of oil assets belonging to the federation to the Nigerian Petroleum Development
Company, a subsidiary of the NNPC.
of oil assets belonging to the federation to the Nigerian Petroleum Development
Company, a subsidiary of the NNPC.
NPDC has paid $100m for these assets, from which it
extracted crude valued at $6.8bn but paid tax and royalties worth $1.7bn in the
period scrutinised by the auditors.
extracted crude valued at $6.8bn but paid tax and royalties worth $1.7bn in the
period scrutinised by the auditors.
PwC was unable to establish how much of the remaining $5.1bn
should have been remitted to the government. But the report showed that, along
with the private companies NPDC partnered with, it was extracting crude worth
billions of dollars but yielding very little revenue for the treasury. I was
investigating related transactions when I was suspended.
should have been remitted to the government. But the report showed that, along
with the private companies NPDC partnered with, it was extracting crude worth
billions of dollars but yielding very little revenue for the treasury. I was
investigating related transactions when I was suspended.
The third major item is a claim of $2.8bn by NNPC for
expenses not directly attributable to crude oil operations; PwC said “clarity
is required” on whether such upfront deductions from remittances to the
federation accounts are allowed, or whether the money should have been remitted
to the government. Finally, there are duplicated expenses, “unsubstantiated”
costs, computation “errors” and tax shortfalls; a total of $1.48bn has to be
refunded.
expenses not directly attributable to crude oil operations; PwC said “clarity
is required” on whether such upfront deductions from remittances to the
federation accounts are allowed, or whether the money should have been remitted
to the government. Finally, there are duplicated expenses, “unsubstantiated”
costs, computation “errors” and tax shortfalls; a total of $1.48bn has to be
refunded.
Of the $18.5bn in revenues that the state oil company did
not send to the government, about $12.5bn appears by my calculations to have
been diverted. And this relates only to a random 19-month period, not the
five-year term of Mr Jonathan, the outgoing president.
not send to the government, about $12.5bn appears by my calculations to have
been diverted. And this relates only to a random 19-month period, not the
five-year term of Mr Jonathan, the outgoing president.
Nigerians did not vote for an amnesty for anyone. The lines
of investigation suggested by this audit need to be pursued. Any officials
found responsible for involvement in this apparent breach of trust must be
charged.
of investigation suggested by this audit need to be pursued. Any officials
found responsible for involvement in this apparent breach of trust must be
charged.
The Emir of Kano, Muhammed Sanusi, who was governor of the
Central Bank of Nigeria wrote this in Financial Times on 13 May
Central Bank of Nigeria wrote this in Financial Times on 13 May
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