From exchanges back and forth during the long drawn drama, it was clear that Nigerians were angry with NNPC. Some, in bitter postulations imagined that the Corporation was a haughty, profit-minded, slave-driving multi-national. However, nothing would obliterate the fact that the giant National Oil Company is 100% a Nigerian baby established and managed by Nigerians for Nigeria. - See more at:
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But it bears observing that the Corporation over the years had treated mildly or even whitewashed similar allegations. Perhaps unconsciously, it assumed that simply adhering strictly to its enabling legislation and internationally acceptable corporate governance standards and ethics, it owed no duty to the man on the street. For those who held this opinion, the allegation of unremitted $49.8bn became opportunity to deflate the mighty NNPC: It was not important whether the allegation was fabricated or not, making it stick would make the Corporation look bad, and lose face. Sad.
Maybe the furore and near-panic in government circles that greeted the allegation of missing $49.8 billion crude revenue could be attributed to the personality of the person who made the allegation, the former Governor of the Central Bank of Nigeria, Mallam Sanusi Lamido Sanusi (now the Emir of Kano).
Moreover, the drama may not have played out for so long if Sanusi had remained consistent in his allegations. From the original $49.8 billion, the former CBN governor later came down to the sum of $10.8 billion as the amount that was unremitted by NNPC. That was at a press conference where the Inter-Agency Reconcilliation Committee announced its preliminary findings that $39 billion had actually been remitted to the Federation Account. Members of the Committee were drawn from the Ministry of Finance; Ministry of Petroleum Resources; Federal Inland Revenue Services (FIRS); the Department of Petroleum Resources (DPR); the Petroleum Products Pricing Regulatory Agency (PPPRA) and the CBN.
That same afternoon while appearing before the Senate Committee on Finance, Sanusi informed the Committee that the balance of unremitted revenue to the Federation Account stood at $12 billion, not the $10.8 billion which he had earlier concurred to at the Inter-Agency Reconciliation Committee press conference. At this point the Senate Committee dismissed the Inter-Agency Committee urging it to reconcile their positions before next appearance.
Two months later when the Inter-Agency Committee returned to the Senate Committee and the Coordinating Minister of the Economy, Dr. Ngozi Okonjo-Iweala, who led the team reported that out of the outstanding $10.8 billion previously stated, it had certified and signed off on the claims of NNPC to the tune of $8.7 billion for petroleum products subsidy. Sanusi, who was present at the hearing, expressed satisfaction with the findings of the committee.
It was at that hearing that Dr. Okonjo-Iweala averred that the Committee had no technical competence to verify the claims of $2.1 for pipeline repairs and maintenance, and strategic reserves and suggested that forensic auditors be engaged to examine the expenditure as claimed by the NNPC.
However, like one launching an ambush, stepping out of the Senate Chambers, Sanusi in a prepared press statement stated that $20 billion was the new amount yet to be remitted to the Federation Account by NNPC and not the $12 billion he had earlier alleged or the 10.8 billion given by the Inter-Agency Committee.
Sanusi’s allegations raised other issues including questions as to whether or not kerosene was still being subsidised; how much is NNPC allowed to hold back in its kitty from crude oil sales to defray its operating costs and expenses; and how much should it keep for holding Strategic Stock Reserves.
Fifteen months later, the PricewaterhouseCoopers forensic audit report not only affirmed NNPC’s long held position that allegations of unremitted crude oil revenue or missing oil revenue – whether $49.8bn or $20bn or $12bn or $10.8bn – was a farce from day one, it also answered the questions on kerosene subsidy.
The report asserted that the entire revenue accruable to the Federation Account during the period under investigation was $50.81 billion and not $48.9 billion as alleged by Sanusi. The amount has been fully accounted for and clearly categorised under the various components of the accruable revenue.
The report confirmed the earlier position of the Minister of Petroleum Resources, Mrs Diezani Alison-Madueke, that subsidy on kerosene was still in force as the Presidential directive of October 19, 2009, was not gazetted as required by law, and that there exists no other legal instrument cancelling subsidy on kerosene.
The PwC report did also raise the issue of ‘outstanding $1.48 billion’ being ‘signature bonus due for divested assets and taxes/royalties’ which it recommended should be remitted by NNPC to the Federation Account. Was that not an indictment on NNPC?
The NNPC Group Managing Director, Dr. Joseph T. Dawha in his explanation described the $1.48 billion as comprising of signature bonus, taxes, and royalties on the oil wells divested by Shell, which NNPC acquired and transferred to its upstream subsidiary, the Nigeria Petroleum Development company, NPDC. Signature bonus, according to Dr Dawha, represents the book value of the assets and was estimated at $1.847bn by the Department of Petroleum Resources (DPR).
However, NNPC raised issues with the parameters used in calculating the signature bonus since the assets involved were old wells. NNPC had paid $300 million pending when both parties would come to terms on a mutually acceptable estimate of the book value of the assets.
The NNPC boss submits therefore that the $1.48 billion was not part of the alleged unremitted revenue from crude oil sales or missing oil revenue. And going by the explanation, the $1.48 is not an amount willingly withheld by NNPC but rather an amount which was in dispute by two sister agencies and so the recommendation of the PwC forensic audit report can be seen as a resolution of the dispute. It is therefore erroneous for anyone to see it as an indictment of the NNPC in anyway.
It would be recalled that the Senate had also come up with a similar report after its painstaking investigation of the allegation. The Senate Committee on Finance’s probe report also answered in the affirmative questions raised over the right of NNPC to defray its operational costs before remitting to the Federation Account and the subsistence of kerosene subsidy. It concluded just like the PwC Audit Report that NNPC’s right to defray its operation costs is established in the NNPC Act.
Many Nigerians obviously do not like this; but this does not make it illegal. The Senate as part of the National Assembly holds the solution to the problem through the passage of the Petroleum Industry Bill which has been proposed to give legal backing to the reforms recommended in both reports.
Beyond the hoopla and hysteria, were there any lessons gained from the Sanusi allegations? Several! A significant lesson is that openness and transparency should be the rule of the thumb in the transactions of a public enterprise like the NNPC.
Secondly, the public deserves to know how its oil wealth is being managed. As a matter of fact, one assumes that the NNPC has learnt the vital lesson that explanation of issues regarding its transactions does not have to be just once and that it owes it a duty to the Nigerian public to explain as many times as necessary till the people understand and assimilate the issues.
All said and done, the legislature and executive must be proactive in terms of putting in place legislations, institutions and processes that make for robust inter-agency interactions to eliminate the kind of misunderstanding that led to the allegation in the first place. If such proactive measures had been in place the pains and costs of the past fifteen months could have been avoided.
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