Reps Decry Corruption In NNPC, Commence Probe


Following reports of corruption, lack of transparency and accountability in the manner the oil revenue of the country is being managed by the Nigeria National Petroleum Corporation, NNPC, members of the House of Representatives this morning resolved to institute a wholesale probe into the activities of the corporation, with a view to tracking the country’s resources from the sector.

The decision to probe the corporation followed the motion brought to the house by the Minority Whip of the House, Hon Raphael Samson Osagie from Edo State.

The lawmaker, who was particularly peeved by the recent reports of rejection of August allocation by the state governments following the inability of the corporation to account for the controversial N450billion allegedly owed the federal allocation committee, held that the non-remittance of N450billion by the NNPC to the Federation Account smacks of breach of the country’s constitution.

Hon Osagie prayed the House to mandate the combined Committees on Finance, Petroleum and Gas to inquire into how the NNPC has been remitting revenue into the Federation Account in view of the importance of accurate revenue projection in the national budget and to ascertain its level of compliance with section 162(1) of the constitution of the Federal Republic of Nigeria 1999 as amended.

Osagie also prayed the House to further mandate the committees to ascertain the level of compliance of other parastatals and agencies in the Ministry of Petroleum Resources, particularly the Petroleum Product Price Regulatory Agency, PPPRA, against the backdrop of allegations by other tiers of government that these agencies have shortchanged the Federation Account to the tune of N700billion and make appropriate recommendations to the House within three weeks.

The motion received the support of all members and the prayers were unanimously adopted by the House.

State governments last Friday rejected their August allocation following the breakdown in the negotiations over the repayment plans of the N450 billion illegally deducted from the Federation Account by the NNPC.

The state commissioners of finance had declared at the monthly meeting of the FAAC, which was rescheduled for last Friday that unless the NNPC refunded the money, they were no longer willing to receive allocations from the Federation Account until further notice.

The commissioners of finance at the meeting demanded an immediate stoppage of upfront deductions of funds meant for the subsidisation of petroleum products, as well as upfront deductions to finance joint venture cash calls.

The commissioners insisted that the practice of deducting from the source for equity (JV Cash Calls) negates the provisions of section 80, sub-sections (1) (2) (3) and (4) of the 1999 Constitution which stipulates that all revenue accruing to the federation must first be paid into the Federation Account before disbursement.

However, a truce was brokered last Tuesday when the corporation accepted to pay back the unremitted fund in 32 instalments starting from this month.

The controversies over the debt was sparked off by the alarm raised by the former Minister of State for Finance, Remi Babalola that the corporation was insolvent and as such could not remit the sum into the federation account.

Babalola’s position was supported by the reconciled industry audit of NNPC operations covering 2006 and 2008 published recently by the Nigerian Extractive Industries Transparency Initiative, NEITI.

The report showed that the sum of $932.2 million was captured as the total unresolved differences for petroleum profit tax (PPT), royalties and signature bonuses, apart from a total oil and gas income of $344.686 million for the period.

According to the report, the NNPC was unable to explain the differences of about 3,092,304 barrels between the volume of total oil allocated by the corporation and the volume actually lifted by companies for the period.

The unresolved differences and the controversies that followed claimed Babalola as its first casualty.

He was redeployed to the Special Duties Ministry in what appears to be a punitive action by the presidency for going public with the issue.

Babalola eventually resigned his position. Also, the Presidency ordered a forensic audit on the accounts of the corporation.

Minister of State for Finance, Yawaba Lawan-Wabi, recently assured that the forensic audit report was nearing completion, as it is currently being analysed by the appropriate authorities, pending a formal publication.

Early in the year, the Federation Accounts Allocation Committee gave a 30-day ultimatum to NNPC to remit the total amount to the Account or face dire consequences.

The threat was made by Alhaji Usman Rebo, Chairman of the Finance Commissioners’ Forum and Taraba State Commissioner for Finance in a chat with journalists after the Technical and Plenary meetings of the committee held in Abuja.

Rebo Usman, maintained that the concern of members of Federation Account Allocation Committee, FAAC, has been seriously heightened by the corporation’s seeming lackadaisical attitude to the lingering debt issue.

“We have resolved to extend our last ultimatum by another one month for NNPC to come up with a repayment schedule. After that, the whole nation will hear from us, because it is an issue we cannot just sweep under the carpet,” he said.

—Desmond Utowmen/Abuja