Former Central Bank Governor and now Emir of Kano,
Muhammadu Sanusi II who blew the lid on the missing NNPC
money has reviewed the recently released PWC auditors report
on the missing NNPC monies. He shared his thoughts in a
piece titled 'Unanswered questions on Nigeria’s missing oil
revenue billions" published in the Financial Times yesterday
May 13. Read what he wrote below
Just over a year ago President Goodluck Jonathan
suspended me from my position as governor of the
Central Bank of Nigeria after I questioned an estimated
$20bn shortfall in oil revenues due to the treasury from
the state oil company. As I said then, you can suspend
a man, but you cannot suspend the truth. The
publication last month of a PwC audit into the
“missing billions” brings us a step closer to it.
When I was central bank governor I raised three broad
questions. First, did the Nigerian National Petroleum
Corporation remit to the government the entire
proceeds of its crude oil sales? Second, if it did not, is
there proof of the purpose to which the unremitted
amounts were applied? And third, did NNPC have the
legal authority to withhold these funds?
Contrary to the claims of petroleum minister Diezani
Alison-Madueke, the audit report does not exonerate
the NNPC. It establishes that the gap between the
company’s oil revenues between January 2012 and
July 2013 and cash remitted to the government for the
same period was $18.5bn. And it goes into detail
about the NNPC’s account of how it used that money,
which raises serious questions about the legality of the
state oil company’s conduct.
The auditors say a significant part of the unremitted
funds is supposed to have gone towards a kerosene
subsidy that had been stopped two and a half years
earlier by the late President Umaru Yar’Adua. His
decree never appeared in the official gazette, leading
some to question whether it ever had legal force.
Evidence disclosed in the report suggests this is a
sideshow. The executive secretary of the agency
charged with administering subsidies confirmed that,
acting on Yar’Adua’s orders, it had ceased granting
subsidies on kerosene. There was no appropriation for
such a subsidy in the 2012 or 2013 budgets.
Throughout all this, Nigerians paid 120-140 naira a
litre of kerosene, far more than the supposed
subsidised price of 50 naira. Yet the state oil company
withheld $3.4bn to pay for a subsidy that in effect did
not exist. I have consistently held that this was a
scam that violated the constitution and siphoned off
money from the treasury.
The second major item raised in the report relates to
the transfer of oil assets belonging to the federation to
the Nigerian Petroleum Development Company, a
subsidiary of the NNPC.
NPDC has paid $100m for these assets, from which it
extracted crude valued at $6.8bn but paid tax and
royalties worth $1.7bn in the period scrutinised by the
auditors. PwC was unable to establish how much of
the remaining $5.1bn should have been remitted to the
government. But the report showed that, along with the
private companies NPDC partnered with, it was
extracting crude worth billions of dollars but yielding
very little revenue for the treasury. I was investigating
related transactions when I was suspended.
The third major item is a claim of $2.8bn by NNPC for
expenses not directly attributable to crude oil
operations; PwC said “clarity is required” on whether
such upfront deductions from remittances to the
federation accounts are allowed, or whether the money
should have been remitted to the government. Finally,
there are duplicated expenses, “unsubstantiated” costs,
computation “errors” and tax shortfalls; a total of
$1.48bn has to be refunded.
Of the $18.5bn in revenues that the state oil company
did not send to the government, about $12.5bn
appears by my calculations to have been diverted. And
this relates only to a random 19-month period, not the
five-year term of Mr Jonathan, the outgoing president.
Nigerians did not vote for an amnesty for anyone. The
lines of investigation suggested by this audit need to
be pursued. Any officials found responsible for
involvement in this apparent breach of trust must be
charged.
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