The Peoples Alternative Political Movement (TPAP-M), has faulted the decision of the Nigeria National Petroleum Corporation (NNPC) to acquire 20 per cent stake in Dangote refinery.
In a statement by Comrade Omotoye Olorode for TPAP-M Secretariat, the movement said as a government agency, NNPC lacks the powers to take a loan to fund a private business.
“However, upon a critical review of the relevant provisions of the Constitution and other relevant statutes TPAP-M has found that the NNPC lacks the power to take a loan from financial institutions to fund the enterprise owned by a private corporate body or individual. It is pertinent to point out that the power of the NNPC to borrow is circumscribed by section 82 of the NNPC Act which provides that “The Corporation shall not, without the approval of the National Council of Ministers, borrow any sum of money whereby the amount in aggregate outstanding on any loan or loans at any time exceeds such amount as is for the time being specified by the National Council of Ministers.” From the information at our disposal the NNPC did not seek the approval of the Federal Executive Council to borrow the said sum of $3.2 billion.
Furthermore, under the current political dispensation the power of government at all tiers to borrow is regulated by the Fiscal Responsibility Act, 2007. As one of the parastatals under the Ministry of Petroleum Resources the NNPC is required to comply with the provisions of the Fiscal Responsibility Act pursuant to section 21 thereof. Indeed, for the avoidance of doubt, the NNPC is one of the Corporations, agencies and government-owned companies listed in the Schedule made pursuant to Section 21 of the Act. By virtue of section 41 (1) (a) of the Act the power of Government to borrow is limited to “capital expenditure and human development, provided that, such borrowing shall be on concessional terms with low interest rate and with a reasonable long amortization period subject to the approval of the appropriate legislative body where necessary”. It is undoubtedly clear that the federal government did not seek the approval of the National Assembly to borrow the said sum of $3.2 billion.
“In view of the undeniable fact that the NNPC has neither sought the approval of the Federal Executive Council and the National Assembly to borrow the sum of $3.2 billion to invest in Dangote Refinery we call on the Honourable Minister of Petroleum Resources to restrain the Management of the NNPC to stop the illegal transaction without any further delay. However, if the NNPC is allowed to take the loan TPAP-M will not hesitate to invoke section 51 of the Fiscal Responsibility Act which states that “A person shall have legal capacity to enforce the provision of this Act by obtaining prerogative orders or other remedies at the Federal High Court, without having to show any special particular interest.”
“The planned investment in the Dangote Refinery is a blatant disregard of section 16 (2) (c) of the Constitution which provides that “the economic system is not operated in such a manner as to permit the concentration of wealth or the means of production and exchange in the hands of few individuals or of a group.”
TPAP-M noted that any loan given to the Corporation is unlawful and a contravention of the Act guiding borrowing in the country.
“Therefore, any lending carried out by any financial institution in contravention of the Act is unlawful in every material particular. According to the Management of the NNPC, arrangements had been concluded with a consortium of financial institutions that would provide the loan. The attention of such institutions ought to be drawn to section 45 of the Act which states that “All banks and financial institutions shall request and obtain proof of compliance with the provisions of this Part before lending to any Government in the Federation,” the statement said, “The movement insisted that the “NNPC would have been required to “specify the purpose for which the borrowing is intended and present a cost-benefit analysis, detailing the economic and social benefits” of the loan of $3.2 billion to invest in a private Refinery when the nation’s refineries have been abandoned.”
TRAP-M went further to say that having done its findings, it discovered that the federal government granted approval for the Dangote Refinery to be sited in the Free Economic Zone in Lagos, granted duty waivers in respect of the imported machinery and special concession to purchase foreign currencies at the official rate. Thus, the contribution of the federal government to the Dangote Refinery is more than $4 billion.
“TPAP-M wants to remind Nigerians about the looting they call privatization which handed the banking and power sectors especially to those who ruined these sectors which then continue to be saved (“bailed out”) from complete collapse with public funds!,” it added.