Missing $20 billion: Senate, Okonjo-Iweala can’t vouch for NNPC documents, opt for forensic examination

Former Finance Minister, Ngozi Okonjo-Iweala

The NNPC insists that it owes no money to the government. But its documents can only be verified by forensic experts.

The Nigerian Senate on Thursday ordered a forensic review of documents presented by the Nigerian National Petroleum Corporation, NNPC, purporting to show how a huge chunk of alleged missing $20 billion oil money was spent. The Senate’s directive was made after finance minister, Ngozi Okonjo-Iweala, declined to vouch for the documents’ validity.

Mrs. Okonjo-Iweala said her ministry lacked the “capacity and expertise” to guarantee the authenticity of documents, and will prefer an independent forensic review to “satisfy Nigerians”.

“These are extraordinary times. These are not ordinary times,” the minister told the senate finance committee investigating the missing sum. “We believe in transparency. That is why we are seeking an independent forensic team for this to satisfy Nigerians.”

The review should be completed within a month, the chairman of the senate committee, Ahmed Makarfi, said.
The documents the NNPC put forward purport to show how more than $8 billion-from the total $20 billion- was cleared in favour of NNPC as subsidy payments on kerosene and petrol between 2012 and 2013.

The Central Bank governor, Lamido Sanusi, who has accused the corporation of diverting the money, said while petrol subsidy may be reconciled, that of kerosene was a clear illegality as a presidential directive had ordered the stoppage of such payments since 2009.
The Senate committee confirmed Thursday that even where the NNPC spent the money on kerosene as claimed, it did so illegally as no mandate had overturned the presidential directive.

Mr. Makarfi said it was “confirmed to the whole world” that the more than N800 billion which the NNPC said accounted for kerosene subsidy between January 2012 and July 2013, was claimed without any authorization, or budgetary allocation.

“We have all agreed here that no appropriation was made for kerosene. All agencies that have spoken have confirmed to the whole world that this money was not appropriated,” he said.

The NNPC initially claimed it did not receive the presidential directive. At the hearing Thursday, petroleum minister, Diezani Alison-Madueke, claimed the directive lacked the force of law because it was not gazetted.

She claimed that after the order was released by late President Umar Yar’Adua in 2009, a ministerial committee met and decided to suspend the directive as it considered Nigerians would have had to purchase kerosene at very exorbitant rate.

Regardless of the claims, the finance ministry is to commission an independent forensic audit of the documents the NNPC said it obtained from the Petroleum Products Pricing Regulatory Agency, PPPRA, within a month, the senate committee ruled Thursday.

Missing Oil Billions

Mr. Sanusi has accused the state-run oil firm of failing to pay $20 billion in oil proceeds to the federal government, triggering investigations by the senate.

The CBN governor’s claim emerged in a leaked letter to President Goodluck Jonathan in September 2013. He pegged the amount owed by the NNPC at $49.8 billion, and called for investigations.

Mr. Sanusi revised the figure to $20 billion last week, while the NNPC and the finance ministry admitted $10.8 billion was unaccounted for.

At a meeting with the committee in December 2013, the two offices assured that the outstanding $10.8 billion would be reconciled immediately. It failed to do so for more than two months, with officials complaining of lack of documents detailing specific expenditure.

On Thursday, the NNPC and the petroleum minister, Diezani Alison-Madueke, provided their first official analysis of how the $10.8 billion was purportedly expended on subsidy on petroleum products, crude oil and products losses, national strategic reserves and pipeline maintenance.

“The impression many Nigerians have is that $10.8 billion is seated in the four towers of the NNPC,” group managing director of NNPC, Andrew Yakubu, said in reference to the corporation’s office in Abuja.

“Nigerians believe NNPC is sitting on money. But I want it known that these monies we are talking about are not realizable flows.”

Mr. Yakubu said out of the $10.8 billion, “unpaid petroleum products subsidy” took $8.76 billion; crude oil and products losses gulped $0.76 billion; national strategic reserve holding cost took $0.46 billion; while pipeline maintenance and management cost consumed $0.91 billion.

He said the subsidy claims was “non-realizable” as it merely amounted to what the NNPC was due, but was not paid by the government as subsidy. He said the subsidy claims were signed off by the PPPRA.

But finance minister, Mrs. Okonjo-Iweala, said an independent forensic examination of the documents, will be required to “satisfy Nigerians”.

Balance of $8 billion

Mr. Sanusi had earlier said he would accept $1.2 billion as extra subsidy payment, if the NNPC so claims, to raise the outstanding figure to $12 billion.

On the balance of $8 billion, he insisted Thursday he had not received any document showing the spending of $2 billion on what is called “Third Party financing”; and another $6 billion which he accused the NNPC of dubiously cornering into private pockets, through the National Petroleum Development Company, NPDC.

The petroleum ministry and the NNPC did not defend that concern.

Mr. Sanusi, however, said he acknowledged that only a part of the $6 billion should go to the federal government.

The decision on whether the government is entitled to the proceeds of that NPDC partnership, as the CBN governor claimed, and how much the government should have received, will require a separate legal opinion, finance minister, Mrs. Okonjo-Iweala, said.

The senate finance committee said it will seek the advice of the Attorney General of the federation, Mohammed Adoke, on the matter next week.


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  • NaijaMindOfChange

    NNPC in the hand of the evil ones. Nothing will still come out if all this investigation rather they will keep using the medium to loot this country, a serious overhaul is required within the NNPC system.

    • redeem

      what about the 98b that sanusi stole

      • Milat

        where and when?

      • Enemona

        CHEAP SHOT

  • Jr IBE

    I’m 21years old accounting student and I believe I can do a better job as a Finance Minister than Ngozi! She’s a total failure who should be sitting back home taking care of her kids rather than insulting nigeria image!

    • Muyideen

      That is why it looks like you lack knowledge. What Ngozi has done to the Nigerian economy can’t be compared to what other people has done in time past.

      • Ikechukwu_67

        How muyideen? A coordinating minister who couldn’t corroborate any figures? Is this the economic guru we are talking about? When we’re talking about 20 billion dollars missing? Are you kidding me?

    • Muyideen

      It looks like you are still in diapers! Grow up and then come back to speak at the elders forum. Ngozi will teach all your professors accounting standard.

      • Abdul Nagge

        We are now seeing how she teaches Sunusi and the committee. Actually I was disappointed in her as she said that her ministry lacked the capacity and expertise to hguaguarantee the authenticity of documents. Now as she said her staff lacked something definitely she is also involved because it is the types their work to do every possible to figure such kind of treak. But finally she give up as a head of ministry.

        • Jr IBE

          Good one dude! Best answer ever! Thank you!

      • Ikechukwu_67

        She would teach the sought of accounting standards that would make her defend an organisation that would spend billions of dollars not appropriated for in the budget? I can imagine how good she is…

    • Usman

      That is right, I will have confidence in you better than her, waste of resources at MIT and Harvard

  • Okikiola Beckley

    According to Diezani and her people at NNPC,there is still subsidy on kerosene and yet no money was appropriated in the budget to pay for this subsidy. So she dipped her hands into the NNPC account and pay for this subsidy. This is criminal and it carries a jail term. Very similar to Stella buying bulletproof cars without appropriation.

    • Larrymaik

      Kai, na wa for you o. It simply means they made purchase at a higher price and sold at a lower price, so are short of the balance which should be paid back to NNPC as subsidy

      • Ikechukwu_67

        But it’s criminal

    • Usman

      it’s indeed worst than Stella’s case, collaboration with criminals to cripple Nigeria of it’s resources

    • Ette

      But who will jail this thieving people when their head, GEJ is the chief defender of the corrupt. Otherwise right from when SANUSI wrote a letter to GEJ in September 2013, head would have rolled. All the reports on NNPC – KPMG, NEITI, Ribadu etc all indicates monumental fraud in that organization. God help us.

  • Allayes

    I thought the NNPC boasted earlier in the week that everything will be cleared up by Thursday and Sanusi will be put to shame?

  • bloggernaija

    This woman should just go back to her desk job at the world.
    Postulating unviable economic theory from behind a camera would fit her better.
    She is not even curious.
    All the revelations coming from the CBN governor should be coming from her office
    Jonathan should fire and replace her with madam due process