Oil Revenue Leakages: Another Chance for Nigeria – Nasir Ahmad El-Rufai

Published:7 Feb, 2014

The Presidential Economic Team of 2003 to 2007 which I was privileged to be a member had a running joke – that the NNPC was an independent federal republic on its own totally separate from and way superior to the Nigeria we all worked for! This joke was our way of criticising the way and manner the NNPC not only sells crude oil as an agent on behalf of the government of the federation as in its enabling law, but even then felt entitled to spend as much of the proceeds of sale as it deemed fit.

The NNPC had begun then to be a law unto itself, outside our national laws and above the constitution, hence our joke. Recent revelations of oil revenue leakages have confirmed that this is a joke that has turned into a macabre reality. Our nation’s finances are in grave danger of becoming zero due to the conduct of a rogue institution that has become more powerful than its principal under Jonathan’s watch.

For a country dependent on oil revenues for most of its income, Nigeria cannot claim to have exercised the closest scrutiny on this vital resource. At least not in recent times. As bad as this gross neglect has been, it is surpassed by the failure to seize the moments that have also been presented to the country in recent times to restore some sanity and integrity to the collection and remittance of revenues. The conversation around the sudden explosion in the fuel subsidy payments from N300bn in 2009 to over N2 trillion in 2011, the protests around the removal of petrol subsidy in January 2012, and the subsequent investigations into the scandal regrettably did not coalesce into a new deal on revenue management or sanctions for the beneficiaries of the obvious fraud!

Another such opportunity to clarify compliance with the constitution, law and due process in the collection and remittance of oil revenues has been presented by the rolling revelations made by brother CBN governor Sanusi Lamido Sanusi. It is a moment the whole country should seize, so that public confidence can be restored in the operations of the NNPC and integrity of the revenue remittance process. But to get there and understand the issues clearly, let’s summarise the constitutional position, the law and the factual contentions.

Our constitution is very clear in sections 80, 81, 82 and 162 in requiring that all revenues are to be paid into the federation account for distribution to various tiers of government in accordance with the provisions of the constitution and the revenue allocation act. No institution or person can spend a kobo on fuel subsidy or pipelines repairs from these revenues without the funds being first paid into the federation account, and then subjected to due appropriation by the National Assembly. Any spending outside this lawful framework is a case of an agent not accounting honestly for proceeds of sale to a principal. In everyday language, that illegal conversion is called theft, pure and simple, and in violation of the constitution. No one, whether it be NNPC or the Jonathan spin-masters should be allowed to obscure this clear legal position.
Now, what are the facts surrounding the latest case of non-remittance of federation revenues?

In a letter to the president in September last year, Sanusi expressed concerns about the non-remittance of $49.804 billion, monies due to the federation account from crude oil sales. Until December when the letter became public, neither the presidency nor the NNPC responded to the issues, believing like every other instance of corruption allegation, the matter will die a natural death over time. Internally, within the Jonathan administration, no clear action was found to have been taken to cross-check the veracity of CBN’s concerns about the NNPC owing the federation account some N8 trillion.

The NNPC demurred only when these concerns became public, insisting it was not owing the federation account. When all the parties – CBN, NNPC and the Federal Ministry of Finance – met to reconcile accounts, it was agreed that indeed some funds had not been accounted for and may need further reconciliation. The outstanding sum amounted to $10.8bn (according to NNPC and Ministry of Finance on one side) or $12bn, according to the CBN. Further to this, the NNPC then came up with another afterthought – that it had spent the $10.8bn on gasoline and kerosene subsidy payments, repairs of vandalised pipelines and operational costs. It did not appear that anyone believed the NNPC, on its use of the money, its right to withhold the money in the first place and its initial denial of owing the federation account.
The CBN is obviously one of those not buying the NNPC’s explanation. This week, the apex bank raised the figure of non-remitted funds to $20bn, including the $12bn outstanding from the reconciliation. The balance includes $6bn worth of crude oil NNPC shipped for the NPDC its upstream subsidiary, and another $2bn from “third-party” financing.

What has been lost in the emotions unleashed by these series of disclosures are the substance of the issue, and the caveats inserted by the CBN governor. His letter to the president and public statements are drawing attention to the non-remittance or non-repatriation of funds to the Federation Account. There was no claim then that these monies are missing, at least not yet. That will be beyond the CBN’s brief. But as the banker to the government, the CBN is within its mandate to declare what sums it has received in relation to the funds expected. The onus is thus on the NNPC to explain why these monies have not been remitted or why they cannot be remitted, and point to the laws that permit them to so act. Anything other than this is admission of theft of federation account proceeds and the 36 states and their local governments should act to recover the amounts, if the Jonathan administration does not.
It is my view that the NNPC have to quickly refund the amounts or prove the numbers wrong. It cannot take comfort on the brittle ground that the sums said to have not been remitted have fluctuated. It has not convincingly explained why it held on to monies belonging to the Federation Account, and why it used the monies for its own purposes without the lawful authority of appropriation by the National Assembly. Every kobo not credited to the country or not properly accounted for by an agency of the government violates the constitution and the law.

I do not believe that we have sunk so low or that our moral prisms have so contracted as to consider $10bn – nearly a third of the annual federal budget – as too puny to worry about. A kobo of public funds not properly accounted for should bother us, because a person that can steal a penny will steal billions if opportunity presents itself. We should rather aspire to live in a country whose revenues do not leak, leading us free to concentrate on value-for-money in government investments and expenses.

The Federation Account belongs to the federal, state and local governments, and the quantum of the balances it contains should concern every Nigerian. Many of the 36 states are rightly concerned that the explanations offered imply that the NNPC can practically shortchange them at will. The conduct of the NNPC thus distorts the revenue allocation formula, already weighted too much in favor of the Federal Government. It must be in the interest of the FGN and the NNPC not to allow the perception to fester that the NNPC has indeed become a state within a state, protected and reinforced in its law breaking by a corrupt and benefitting Jonathan government.

As a minimum, that would entail thorough scrutiny of the NNPC accounts which have not been audited since 2005, if only to avoid legal entanglements with state government who are at liberty to sue for the non-remitted funds. The National Assembly has to ask the tough questions regarding the legality of the strategic alliance agreements between the NNPC/NPDC and Atlantic Energy and other fly-by-night ‘indigenous operators’ with not track record other than connections to the Villa. It is a serious matter when a CBN governor goes public with the charge that “these agreements merely serve to transfer revenue due to the Federation into private hands” – yet another clear, more serious case of theft of federation revenues by a private firm, facilitated by the NNPC.

Citizens should put pressure on all elected officials that amidst these contentions, Nigeria will emerge with a transparent, rigorous and effective oil revenue collection and remittance system. While awaiting passage of the much delayed Petroleum Industry Bill, the NNPC should in the interim be compelled to remit all funds first, and submit verifiable claims for reimbursements later, after due appropriation by the National Assembly. In the meantime, we should thank for the CBN and its courageous governor for providing the facts and figures, and the opportunity to introduce real transparency in the very opaque oil revenue remittance regime of Nigeria. The ball is now in our court to ensure that this case of financial malfeasance is not swept under the Jonathanian table!

– Nasir Ahmad El-Rufai

Views expressed are solely the author’s

  • Abdulhameed Bello

    AUCTION! AUCTION!! AUCTION!!!
    NIGERIA CUSTOM SERVICE (NATIONAL AUTHORIZED CAR AUCTIONS/SALES)
    WE HAVE DIRECT TOKUNBO CARS VERY CLEAN AND BRAND NEW CARS FOR SALE AT CHEAPER PRICES.
    These cars were siezed by government officials at border and the
    time duration given to the owners to claim their cars has elapsed so
    they are been sold at give away prices. All you need do is to call The Custom Officer In Charge
    Name: MR Abdulhameed Bello
    Contact NO:08064793882
    Email: ngcustomservices33@gmail.com
    place An Order Of Your Choice Now.We deal in all cars, you can also make a request for the
    vehicle you want to purchase and also your budget for any vehicle,
    we deliver all over the 36 States in Nigeria
    place an order of your choice.FEATURES BELOW
    Acura MDX # 600,000
    Acura TL # 500,000
    Acura ZDX # 700,000
    Audi A4 # 400,000
    Audi A6 # 600,000
    BMW 3-Series # 650,000
    BMW 5-Series # 850,000
    BMW X5 # 850,000
    BMW X6 # 1M
    Ford Escape # 600,000
    Ford Explorer # 500,000
    Honda Accord # 550,000
    Honda City # 500,000
    Honda Civic # 500,000
    Honda Crosstour # 850,000
    Honda CR-V # 750,000
    Honda Odyssey # 650,000
    Honda Pilot # 850,000
    Hyundai Accent # 550,000
    Hyundai Elantra # 450,000
    Infiniti FX35 # 1M
    Infiniti FX45 # 1.2
    Infiniti QX4 # 950,000
    Isuzu Trooper # 750,000
    Jaguar S-Type # 450,000
    Jeep Liberty # 1.3
    Kia Sorento # 550,000
    Land Rover Discovery # 1.6
    Land Rover Freelander # 1.3
    Land Rover LR3 # 850,000
    Land Rover LR4 # 800,000
    Land Rover Range Rover # 2M
    Land Rover # 1.5
    Range Rover Sport # 1.6
    Land Rover Vogue # 1.3
    Lexus GS # 1M
    Lexus GX460 # 950,000
    Lexus GX470 #1 000,000
    Lexus LX 570 # 750,000
    Lexus RX 300 # 650,000
    Lexus RX 330 # 750,000
    Lexus RX 350 # 850,000
    Mazda 6 # 550,000
    Mazda 626 # 650,000
    Mazda MPV # 650,000
    Mazda Tribute # 950,000
    Mercedes-Benz C-Class # 650,000
    Mercedes-Benz E-Class # 750,000
    Mercedes-Benz G-Class # 550,000
    Mercedes-Benz GLK # 350,000
    Mercedes-Benz ML # 300,000
    Mitsubishi Endeavour # 350,000
    Nissan Altima # 450,000
    Nissan Armada # 850,000
    Nissan Maxima # 550,000
    Nissan Murano # 500,000
    Nissan Pathfinder # 500,000
    Nissan Primera # 300,000
    Nissan Quest # 500,000
    Nissan Sentra # 550,000
    Nissan Xterra # 550,000
    Peugeot 406 # 430,000
    Peugeot 407 # 500,000
    Peugeot 607 # 650,000
    Toyota 4Runner # 850,000
    Toyota Avalon # 600,000
    Toyota Avensis # 750,000
    Toyota Camry # 350,000 – # 1M
    Toyota Corolla # 550,000
    Toyota FJ Cruiser # 750,000
    Toyota Hiace # 1M
    Toyota Highlander # 1M
    Toyota HiLux # 900,000
    Toyota Matrix # 550,000
    Toyota Prado # 1M
    Toyota Rav4 # 700,000
    Toyota Sequoia # 450,000
    Toyota Sienna # 650,000
    Toyota Tacoma # 400,000
    Toyota Tundra # 800,000
    Toyota Venza # 600,000
    Toyota Yaris # 550,000
    Volkswagen Beetle # 300,000
    Volkswagen Golf # 350,000
    Volkswagen Jetta # 400,000
    Volkswagen Passat # 550,000
    Volkswagen Touareg # 300,000
    And also several trucks like MAN, MACK, VOLVO, MERCEDES etc
    LEATHER AND FABRIC INTERIOR, CHILLING AC, ALLOY WHEELS.
    INTERESTED BUYERS SHOULD PLEASE CONTACT US FOR PURCHASE AND IMMEDIATE

    DELIVERY NATIONWIDE.
    CONTACT MR.Abdulhameed ON 08064793882 FOR INQUIRIES

Related Posts

Recent Posts

Dilemma of the Nigerian Youth, By Gimba Kakanda

These past weeks, I've had reason to reflect more on the place of the Nigerian youth in politics and public service. The inspiration for this was the hypocrisy I witnessed all the times our gerontocratic political establishment opened its door for the young join to them. The strangest dilemma is this: the youth advocate inclusion in governance and participation in politics yet any time a young person...

Security: Governor Bello Advises Citizens To Be Vigilant.

Kogi State Governor, Alhaji Yahaya Bello, has called on the people of the state to be vigilant and security conscious by checking movement of strange persons in their neighbourhood  and report suspicious individuals to security agents. The Governor stated this today in Lokoja at the Jumat Mosque Prayers  to mark the 25th Anniversary of the creation of the state. Bello disclosed that some people have recruited some miscreants and imported...

Governor Ganduje Reaffirms Commitment To Completion Of Ongoing Projects.

Kano State government has reaffirmed its commitment to ensure successful completion of the ongoing road projects within the period stipulated.   The State Commissioner Ministry of Land and Physical Planning Dr. Farouk Bibi Farouk gave the assurance while inspecting the ongoing road construction works at Lamido and Kingsgarden - Kwanar Tudun Wada road in Nassarawa Local Government Area.   Dr. Farouk disclosed that the administration of Dr. Abdullahi Umar Ganduje awarded the construction of 11...

Write Your Will Before Travelling For Hajj – Abuja Islamic Cleric Tells Pilgrims

An Abuja-based Islamic scholar, Sheikh Yahya Al-Yolawi, has advised intending pilgrims to settle their debts and leave their wills behind before travelling to Saudi Arabia. Al-yolawi, who is the Chief Imam of Area 10 Mosque, made the call while delivering Jumma’at sermon title:“ Essential tips for Hajj Preparations“ on Friday in Abuja. “An intending pilgrim should settle his debts and leave behind him a clear record as well as writing all his wills or what...

My Life Flashed Before My Eyes – Virgin Airline Owner, Richard Branson Almost Killed in Crash Horror

Multi-billionaire business tycoon and owner of Virgin Airline, Richard Branson, has narrated his near-death experience on a training cycle run with his two grown up children when disaster struck which nearly took his life. Read below; A couple of nights ago I went cycling on Virgin Gorda with Holly and Sam as part of my training for the Virgin Strive Challenge. I was heading down a hill...

50 Cent Talks “Power”, Sex Scene, The Game and More On Big Boy Tv

50 Cent is currently on a media campaign in support of his hit show Power, and recently stopped by Big Boy TV to catch up with his fans. Curtis spoke on the development of his character on the show, his recent sex scene, settling differences with The Game, Starz Vs. Netflix, only flying coach once in his life, and more. Watch below and expect DJ Whoo Kid and G-Unit’s Lost...

Watch Jidenna Perform “Little Bit More” On Jimmy Kimmel Live

Jidenna continues to work on his Long Live The Chief album, and after blessing fans with a video for his single “Little Bit More” last month, he stopped by to perform the song on last night’s airing of Jimmy Kimmel Live! Watch Jidenna light up the stage below and check out his  “Chief Don’t Run”visuals if you haven’t already.

Japan Warns On Measles After Infected Fan Joins Bieber Concert

Japanese authorities have warned of a possible measles outbreak after a fan who went to a Justin Bieber concert near Tokyo was diagnosed with the contagious disease, officials said Friday. A 19-year-old man had a fever of more than 39 degrees Celsius (102 degrees Fahrenheit) and a rash over his body after returning from Indonesia earlier this month, the Disease Control and Prevention Center (DCC) and local media have said. Despite the condition, the man,...

Nigeria’s D’Tigers Now 16th In Latest FIBA World Ranking

Nigeria's men basketball team, D'Tigers have moved 9 places to rank 16th (with 106.2 points) in the 2016 FIBA World Ranking released on Thursday. The African champions outshone their arch rivals, Angola to lift the Nations Cup for the first time last year which earned the country an automatic qualification to the Rio 2016 Olympic Games. The performance of teams at the just concluded Games also led to drastic changes...

Buhari Lacks Political Will To Rescue Chibokgirls – BBOG

The #BringBackOurGirls (BBOG) movement, yesterday, took a swipe at President Muhammadu Buhari for lacking the political will to rescue 218 Chibok girls. BBOG said as opposed to the President’s excuse that he lacked “credible intelligence” to rescue the girls, what he actually required was the political will to take decisive action in the present circumstance. The group stated this in an address jointly signed by its leaders, Oby Ezekwesili and Aisha Yesufu, which was read...

EFCC Doesn’t Torture Suspects- Magu

 the first time in 13 years, the Economic and Financial Crimes Commission (EFCC), yesterday opened the doors of its interrogation rooms and its cells to reporters to inspect. Chairman of the anti-graft agency Ibrahim Magu said the Commission does not torture suspects because it is investigating non-violence crimes. He added that the anti-graft agency had always put the interest of the country above any other consideration. Magu, who personally conducted reporters round the EFCC cells...

Artist Buries Dress Inside the Dead Sea for 3 Months… See Amazing Transformation That Happened

An artist buried a dress right inside the red sea for as many as three months and brought it out again only to see a totally different thing. In 2014, Israeli artist Sigalit Landau submerged a 19th century-style gown into the lifeless waters of the Dead Sea, for a unique photo project. The dress was retrieved after three months, and as you can see in the photos below, the transformation is quite significant.

NLC Wants Ghost Workers’ Perpetrators Prosecuted

The Akwa Ibom chapter of Nigeria Labour Congress (NLC) has called for the prosecution of all perpetrators of ghost workers syndrome in the nation’s public service. Chairman of the council in the state, Mr Etim Ukpong, made the call in Uyo on Friday in an interview with the News Agency of Nigeria (NAN). Ukpong decried that over the years, different tiers of government had complained of ghost workers but that no perpetrator of the act had been identified or...

#Rio2016: Senate Probes Dalung, Others

Less than one week after the end of the 2016 Rio Olympics in Brazil, where Nigeria won only a Bronze Medal in male soccer game, the Senate has revealed plans to probe the roles of the of Minister of Sports, Solomon Dalung and the Nigeria Olympics Committee (NOC), over the poor performance of the country’s contingent to the global event. Chairman of the Senate Committee on Sports, Senator Joe Obinna Ogba made the disclosure during an interview with...

Lagos To Wait For Crude Export To Get 13% Derivation

In spite of the commencement of production from its newly discovered oil wells, Lagos State may have to wait until crude oil export commences before it joins the league of states benefitting from the 13 per cent derivation principle. This clarification was made yesterday at Federation Account Allocation Committee (FAAC) meeting. This emerged just as allocation available for sharing by three tiers of government for the month of July dipped by N115.369 billion to N443.663 billion as against June’s allocation of...

EFCC Arrests Man Over $145,000 Love Scam

The Economic and Financial Crimes Commission, EFCC, on Tuesday, said it arrested Iwuchukwu Uche for obtaining money under false pretence to the tune of USD145, 000. Mr. Uche, who said he was a military officer working for the North Atlantic Treaty Organization, NATO, in Kabul, Afghanistan, allegedly collected the money from his victim, H. Uyen, a Vietnamese woman, after promising to marry her. The suspect, who also claimed to be a property agent operating in...

Minister Beaten To Death By Miners

Bolivian miners on Thursday during a clash with the police in the town of Panduro hacked the Deputy Interior Minister to death. Interior Minister, Carlos Romero, confirmed on Friday that reports by witnesses indicated that the 55-year-old was beaten to death following clashes between police and miners in the town of Panduro, 165 kilometres south-east of La Paz. Romero said Illanes had been kidnapped by miners after attempting to initiate talks with them at a roadblock....

20 Shipping Firms Leave Nigeria Over Low Business

Groaning under intense hardship imposed by poor government policies and global economic crunch, over 20 shipping firms have exited the nation’s shores. This is coming as Dockworkers Union of Nigeria (DUN) lamented that over 3,000 workers have already been laid off by various shipping companies, terminal operators and logistic companies, owing to lack of financing and poor import policies of the Federal Government. The workers also blamed the massive retrenchment on the inability of the...

Again, Herdsmen Invade Enugu Community, Kill Catholic Seminarian

Suspected Fulani herdsmen in the early hours of on Thursday invaded the sleepy Ndiagu Attakwu Akegbe-Ugwu community in Nkanu West Local Government Area of Enugu State, killing a Catholic seminarian, Lazarus Okafor, and injuring four others, including a pregnant woman. The suspected herders were said to have invaded the Ogbodo Nwarum family compound in the community at about 2 a.m. and wreaked havoc on the entire household. While the seminarian had severe machete cuts which led...

Majek Fashek, The Rainmaker, Returns With New Single

Reggae star, Majek Fashek, is in the news again. This time, the musician’s numerous fans, especially in Nigeria, are excited that he has finally released the product of his much-publicised collabo with equally gifted singer, Tuface Idibia. The single, which is available on the Internet, is a remix of Majek’s wave-making song titled, No more sorrow from his 1991 album, Spirit of love. Many music fans of the older generation are, no doubt, familiar with the...

Once A Cheater Always A Cheater! Why This Is Not Always True

Once a cheater always a cheater? The experts say this may not always be the case. One therapist, Dr. Nancy B. Irwin, argues that since behavior is learned, it is possible to do a turnaround when it comes to cheating. If you’ve ever been cheated on, your first instinct may have been to break up because you felt you could never trust the cheater again. But depending on the circumstances, you might have another shot at love with...