The Nigerian National Petroleum Corporation, NNPC, management is scheduled to meet with the Federation Accounts Allocation Committee, FAAC, on Monday to attempt to reconcile financial records.
Discrepancies in revenue figures presented to the committee by the NNPC on remittances to the Federation Account had triggered a dispute, leading to the unexpected cancellation of the regular FAAC meeting for November, last Thursday.
The monthly meeting usually held to consider and approve revenue allocation to the three tiers of government was abruptly adjourned indefinitely when members found that the details of revenues actually remitted to the Federation Account for sharing did not add up to what was earlier presented to the FAAC Secretariat.
The FAAC, which has the Minister of Finance, Kemi Adeosun, as Chairman, also has the Accountant General of the Federation, Ahmed Idris, as member.
Other members of the committee include the Accountants-General and Commissioners for Finance in the 36 states of the federation, along with representatives of government revenue-generating agencies, namely the Federal Inland Revenue Service, FIRS; Nigeria Customs Service, NCS and the NNPC.
Following the discovery of the discrepancies in the records, the Chairman, Forum of Finance Commissioners of FFC, Mahmoud Yunusa, said the meeting had to postponed till further notice following directives from their respective state governors.
The FFC Chairman, who is also the Adamawa State Finance commissioner, said the FAAC would only reconvene after all the discrepancies have been reconciled and the revenue figures in the accounts sorted.
Although Mr. Yunusa had hinted of an emergency technical meeting next week between the finance commissioners and the state accountants-general, to review the situation, PREMIUM TIMES learnt on Saturday that the enlarged FAAC meeting is scheduled to reconvene on Monday to attempt to thrash out the alleged discrepancies.
“We are meeting with FAAC on Monday to iron out the issues”, spokesperson of the NNPC, Ndu Ughamadu, said in a text message in response to PREMIUM TIMES’ inquiries on the issue.
“We remitted. There was an issue raised on data. It was more of ‘interpretation of the data.’ Hopefully, it will be resolved next week”, Mr. Ughamadu added.
The issue about discrepancies in records of revenue remittances to the Federation Account has been a recurring decimal in NNPC’s operations over the years.
Between 2011 and 2012, the NNPC was indicted for withholding from the Federation Account about N450 billion it realised from the sale of the country’s crude oil.
A FAAC audit had found out that the revenue, which should have been remitted to the Federation Accounts in compliance with the requirement of the Constitution for all government revenues, was diverted for other purposes without approval from the National Assembly.
Consequently, the FAAC panel had recommended the Corporation to refund the entire money by paying about N6.33billion every month in over 67 installments.
The repayment, which commenced in September 2011 was completed in June 2017, according to the Permanent Secretary, Ministry of Finance, Mahmoud Isa-Dutse.
Again, in March 2016, a new report by the Natural Resource Governance Institute, NRGI, titled: “NNPC draw blank check,” also indicted the Corporation for allegedly withholding billions in oil revenues from the government account.
According to the NGRI, within the first half of the first year of the Buhari administration, the NNPC withheld over $4.2 billion (about N824.7 billion) out of a total of $6.3 billion (N1.24 trillion) revenues realised from crude oil sales in the second half of 2015.
The report said the withheld revenues represented about 66 per cent of the total – $1.4billion earnings from Nigeria’s regular crude oil exports for the period, while $3.4 billion from domestic crude oil sales, and $1.5 billion from oil sold from the corporation’s upstream subsidiary, the Nigerian Petroleum Development Company, NPDC oil fields.
The report said only $2.1 billion (about N413.7 billion) was transferred to the Federation Account.
Besides, the Nigeria Extractive Industries Transparency Initiative, NEITI also has its fair share of reports implicating the NNPC for unremitted revenues.
The transparency and accountability agency reported in the April 2017 edition of its Policy Brief that at a time, the country was desperately looking for foreign loans to bailout its comatose economy, the Corporation failed to remit over $21.8 billion (about N7.2 trillion) and N316.1 billion oil revenue from it’s operations to the Federation Account.
NEITI Executive Secretary, Waziri Adio, said the unremitted funds came from federation assets divested to NPDC and its legacy liabilities; payments for domestic crude oil allocation to the NNPC, and dividends paid from investment in the Nigerian Liquefied Natural Gas, NLNG, but withheld by the NNPC.
Details included outstanding $1.7 billion from a total of $1.8 billion as a result of the transfer of eight oil mining leases, OMLs from Shell Petroleum Development Corporation, SPDC, and $2.2 million from four other OMLs from the Nigerian Agip Oil Company, NAOC, to the NPDC respectively.
About $148.3 million paid as cash calls on the transferred OMLs, in addition to about $1.5 billion legacy liabilities, as well as about $15.8 billion that accrued as NLNG dividends between 2000 and 2014 were yet to be remitted to the Federation Account.
The NNPC is also one of the government agencies and organisations a forensic audit identified as notorious for not remitting government revenues in their operations, a development that re-strengthens calls for reforms.
The NNPC was specifically indicted among several other agencies found to have failed to remit over N450 billion revenue into government coffers between 2010 and 2015, contrary to the provisions of the Fiscal Responsibility Act 2007.