CBN faults Okonjo-Iweala, Alison-Madueke's subsidy figures

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The trading of figures on disbursements for the contentious subsidy on premium motor spirit (PMS), or petrol continued today among key Federal Government officials, as the Central Bank of Nigeria (CBN) puts the amount spent in 2011 at N1.7trillion.

The amount, which is a little less than the country’s total capital budget for the year, contradicts previous figures of N1.4trillion released by other top administration officials.

Minister of Petroleum Resources, Diezani Alison-Madueke, and the Group Managing Director, Nigerian National Petroleum Corporation (NNPC), Austen Oniwon, had put the figure at N1.3 trillion, while Minster of Finance and Coordinating Minister for the Economy, Ngozi Okonjo-Iweala, as well as the Petroleum Products Pricing Regulatory (PPPRA) previously pegged the amount at N1.4 trillion for the year.

But, while testifying before the House of Representatives committee investigating the management of fuel subsidy on Tuesday, the apex bank’s deputy governor in charge of Systems Stability, Kingsley Moghalu, said at least N300 billion more was spent before the end of the year, bringing the final figure spent on petrol subsidy as of December 31, 2011, to about N1.736 trillion.

 “I am aware there have been some testimonies here giving different figures. But as the banker to the Federal Government, the CBN should have the current figure. And although we need to get through documents for the exact figure, but the amount approximately is N1.7 trillion” Mr. Moghalu testified.

The House committee later confirmed that the figure stated in the bank’s written submission was N1.736 trillion.

The new figure adds a puzzling new layer to the contentious subsidy management, which the government has said is unsustainable amid continued debates on the spending.

It is not clear whether government is deliberately escalating the figures to justify its position that continued payment of the subsidy could ground the country’s economy.

The government has blamed a greater part of the subsidy payment on corruption and abuse which it has been criticized for failing to tackle. Yet, the actual amount spent for that purpose in 2011 remained a controversial subject with conflicting figures emanating from different institutions.

Asked at the hearing for a reconciliation of the new amount with what had previously been announced, Mrs Allison-Madueke said the previous figures covered up till October last year.

 “It is only natural that new figures reaching to the end of year should rise,” she said.

The CBN said it had warned of the “implications of possible manipulation” of the subsidy, on the economy, but maintained that the bank’s role in the management of subsidy was limited to making payments.

In two years, between 2009 and 2011, the payment had risen by a troubling 1,523% due to the “multiplicity of beneficiaries,” Mr. Moghalu, who stood in for the CBN governor, Sanusi Lamido, told the lawmakers .

The hearing, in its second week, unfolded the several abuses in the petroleum sector, many of them catalogued by the KPMG audit report, which was first published by Premium Times following government’s failure to release to the public.

The petroleum Minister, Mrs. Madueke told the lawmakers she is yet to act on the report since she is yet to be served with a copy “officially”, though she conceded to keeping a personal copy.

 “If everyone who cares to know has a copy, the government should not waste a second in getting the report it commissioned,” committee chair, Farouk Lawan said.

Amongst several revelations, the report had indicted the NNPC, which the Minister supervises, for falsifying exchange rate used in defraying government’s oil revenues. Officials of the corporation had told the auditors, according to the report, that they obtained lower exchange rate from the CBN by phone.

The apex bank responded to the allegation yesterday, saying all communication on exchange rates, were made only in writing, a point pressed by the lawmakers for emphasis.

The apex bank also said the subsidy burden grew more due to a connivance of oil importers and commercial banks, who make available dubious foreign exchange rates that further pressure the economy.

Sweeping investigations on all banks are ongoing, Mr. Moghalu said, adding that the exercise would be completed by February, after which appropriate sanctions would be meted out to those found culpable of any offence.