The Nigerian National Petroleum Corporation (NNPC) has been accused of non remittance of N4trillion into the federation account from 2010 to 2016.
Under the same period, the Federal Ministry of Solid Minerals allegedly diverted N2billion meant for the federation account.
These revelations were contained in the 2016 Audit report submitted to the Senate Committee on Public Account by the Office of Auditor General of the Federation.
The reports as sighted by Blueprint, also showed that NNPC spent N966billion for repairs of oil pipelines across the country within the same period.
“It was observed from the examination of NNPC report to Technical Sub- Committee of Federation Account Allocation Committee (FAAC) meeting held in December 2016, that a cumulative total of N4, 076,548,336,749.75 trillion as summarised below and detailed, remained unremitted to the Federation Account by NNPC as at 31st December, 2016.
“The total revenue unremitted as at 1st January, 2016 (see the table above) from amounts payable into the Federation Account by NNPC was ₦3,878,955,039,855.73 trillion.
“The sum of N1,198,138,355,860.30 was due in revenue to the Federation Account out of the total generated in 2016, however, NNPC paid the sum of N1,000,545,058,966.20 resulting in an amount withheld of N197,593,296,894.02.
“This brought the total amount withheld by NNPC from the Federation Account as at 31 December 2016 from 2010 to N4trillion,” the report stated.
Our defence – NNPC
But in a written defence to the committee on the query, the NNPC said the unremitted N4 trillion was arrived at without taking cognisance of the subsidy and pipeline repairs and management associated with domestic crude oil transaction.
It said: “Subsidy approved and certified by PPRA from 2010-2015 stood at the N4 trillion. Also in 2016, OMS under recovery stood at the N28.6 billion which brings the total unrecognised subsidy /PMS under recovery to N4 trillion.
“Aside the above, pipeline repairs and products losses so incurred stood at N966 billion for the same period.”
Notwithstanding the corporation’s response, NNPC Group Managing Director Mele Kyari will appear before the Senate committee this week to give clarifications on the issues raised in the Auditor General’s report.
Solid minerals
On the alleged non remittance of N2billion into Federation account by Ministry of Solid Minerals, the report said: “During examination of FAAC records, we observed that a cumulative total of N9, 923,015,028.00 Solid Minerals revenue collected in 2015 was paid into the Federation Account in the year ended 31st December 2016.
“We noted that the Ministry reported the same total revenue figure for years 2014, 2015 and 2016. From records presented for audit, it was also noted that the sum of N2, 838,351,664.97 billion was collected as solid mineral revenue from January to December, 2016. But this amount was not paid into the Federation Account for distribution in 2016, contrary to section 162 of the Constitution of the Federal Republic of Nigeria.
“The Permanent Secretary of the Federal Ministry of Mines and Steel has been requested to explain why the ministry failed to pay the revenues collected into the Federation Account as required by the constitution.”
The report added that the ministry failed to respond to the Auditor General’s query on the issue of non remittance of the sum.
Consequently, the committee headed by Senator Mathew Uhroghide (PDP Edo South), resolved to summon officials of the ministry this week for required explanations on alleged non remittance.
SERAP
Meanwhile, the Socio-Economic Rights and Accountability Project (SERAP) has asked President Muhammadu Buhari to provide spending details of the overdrafts and loans obtained from the Central Bank of Nigeria (CBN) by the federal government since May 2015.
SERAP said the details should include the total overdrafts, the projects on which the overdrafts were spent, repayment of all overdrafts to date, as well as clarity on whether “the $25bn (N9.7trn) overdraft reportedly obtained from the CBN is within the five-percent limit of the actual revenue of the government for 2020.”
Also, the group requested President Buhari to “provide details of spending of overdrafts and loans obtained from the CBN by successive governments between 1999 and 2015.”
The requests were contained in a Freedom of Information request dated March 6, 2021, and signed by SERAP’s deputy director, Kolawole Oluwadare.
The organisation said Attorney General of the Federation and Minister of Justice Abukabar Malami; Minister of Finance, Budgeting and Planning Zainab Ahmed; CBN Governor Godwin Emefiele,and Director-General Debt Management Office Patience Oniha, were all copied.
“Ensuring transparency and accountability in the spending of CBN overdrafts and loans would promote prudence in debt management, reduce any risks of corruption and mismanagement, and help the government to avoid the pitfalls of excessive debt,” SERAP said.
The organisation also said: “Disclosing details of CBN overdrafts and repayments would enable Nigerians to hold the government to account for its fiscal management and ensure that public funds are not diverted, thereby improving the ability of your government to effectively respond to the COVID-19 crisis. This means that the government would not have to choose between saving lives or making debt payments.”
“The increasing level of public debt would threaten the ability of the government to invest in essential public goods and services, such as quality education, healthcare, and clean water. It is the primary responsibility of the government to ensure public access to these services in order to lift millions of Nigerians out of poverty and to achieve the Sustainable Development Goals by 2030,” it further wrote.
SERAP expressed worry over the growing level of public debt which it noted, would increase debt-servicing costs, implying government has less resources to spend on critical public services.
“We would be grateful if the requested information is provided to us within 14 days of the receipt and/or publication of this letter,” the letter read in part.
SERAP said: “If we have not heard from you by then, the Incorporated Trustees of SERAP shall take all appropriate legal actions to compel your government to comply with our request.
“SERAP is concerned about the growing level of debts by the Federal Government, and the apparent lack of transparency and accountability in the spending of overdrafts and loans so far obtained from the CBN, as well as the repayments to date.
“Also, the recent overdraft of $25.6bn (about N9.7trn) obtained from the CBN would appear to be above the five-percent limit of the actual revenue of the Federal Government for 2020, that is, N3.9trn, prescribed by Section 38(2) of the CBN Act 2007. SERAP notes that five-percent of N3.9trn is N197bn.”
It also said while section 38(1) of the CBN Act allows the Bank to grant overdrafts to the Federal Government to address any temporary deficiency of budget revenue, sub-section 2 provides that any outstanding overdraft ‘shall not exceed five-percent of the previous year’s actual revenue of the Federal Government.’
“The CBN is prohibited from granting any further overdrafts until all outstanding overdrafts have been fully repaid. Under the CBN Act, ‘no repayment shall take the form of a promising note or such other promise to pay at a future date, treasury bills, bonds or other forms of security which is required to be underwritten by the Bank.’
“Similarly, the Fiscal Responsibility Act provides in section 41 that government ‘shall only borrow for capital expenditure and human development.’ Under the Act, the government ‘shall ensure that the level of public debt as a proportion of national income is held at a sustainable level.’
“Section 44 of the Act requires the government to specify the purpose of any borrowing, which must be applied towards capital expenditures, and to carry out cost-benefit analysis, including the economic and social benefits of any borrowing. Any borrowing should serve the public good, and be guided by human rights principles.
“By the combined reading of the provisions of the Constitution of Nigeria 1999 (as amended), the Freedom of Information Act, UN Convention against Corruption, the International Covenant on Economic, Social and Cultural Rights, and the African Charter on Human and Peoples’ Rights, there are transparency obligations imposed on your government to disclose information to the public concerning spending of CBN overdrafts, loans and repayments to date,” SERAP said in a statement issued Sunday.
“SERAP has consistently recommended to the Federal Government to reduce its level of borrowing and to look at other options of how to finance its budget, such as reducing the costs of governance, and addressing systemic and widespread corruption in ministries, departments and agencies (MDAs) that have been documented by the Office of the Auditor-General of the Federation,” it said.
Rationalising its demands, the group said: “Our requests are brought in the public interest, and in keeping with the requirements of the Nigerian Constitution; the Freedom of Information Act; the Fiscal Responsibility Act; the Central Bank Act; the Debt Management Office Act; and the country’s international obligations including under the UN Convention against Corruption; the International Covenant on Economic, Social and Cultural Rights, and the African Charter on Human and Peoples’ Rights. Nigeria has ratified these treaties.
“According to our information, your government has reportedly recently obtained $25 billion from the CBN as overdrafts. The Federal Government has also reportedly decided to convert the overdrafts to long-term debt. This latest borrowing from the CBN is in addition to reported over $20 billion external debt, and N7 trillion domestic debt.”
