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

Hon. Jibrin Suspended From House of Reps

Whistle-blower lawmaker, Hon. Abdulmumin Jibrin, has been suspended by the House of Representatives.   The lawmaker from Kano at the centre of the unfolding budget padding scandal was on Wednesday suspended fron the house for 180 legislative days.   The House seats three days in a week and this consequently means that Mr. Jibrin’s suspension would last more than a year.   In a motion recommended by House Ethics Committee chairman, Nicholas Ossai, and adopted by the whole House, Jibrin will also not be...

Nigeria electricity challenge man-made – Fashola

Former governor of Lagos State and Minister of Power, Works and Housing, Babatunde Raji Fashola, said, yesterday, that Nigeria’s electricity problem is man-made. Fashola, who spoke at the maiden edition of Made in Nigeria Festival taking place at Eko Atlantic, Lagos, said his blueprint for the power sector is in three phases: power-generation, steady supply of power and uninterrupted power supply. He has also pledged to ensure the power sector works to the point where Nigeria has uninterrupted power supply. Speaking on...

Aero Airline Staffs Protest at MMIA, Lagos

This is according to an eye witness account. Aero staffs were seen protesting over non payment of salaries for over 6 months and also they were been suspended by the company. The workers storm their premises and stopped any plane from taking off. See more pictures below..        

Waziri Adio: Recession as Opportunity for Reversing Resource Curse

And, sadly, it came to pass. It is well predicted that most countries blessed with natural resources, even in the best of times, perform worse economically than countries not so endowed; and that, when times are tough, countries that are dependent on natural resources come to an assured grief. There is a popular name for this strange but common condition: resource curse. It sounds metaphysical, it seems counter-intuitive even, but it is a position supported by enough...

Kwara State suspends plan to raise N20 billion for infrastructure

Following the launching of the Kwara State Infrastructure Development Fund IFK, the state government says it has suspended plans to raise a N20b bond from the capital market for infrastructure development. Governor Abdulfatah Ahmed disclosed this in a statement through his Senior Special Assistant, Media and Communications, Dr. Muyideen Akorede on Wednesday. The Governor noted that with the launch of the IF-K, which pools resources for funding infrastructure, the N20b naira bond has become unnecessary as all ongoing and new projects...

Kaduna Pursues Affordable Healthcare Through Contributory Scheme

A scheme to guarantee universal access to basic healthcare is to be introduced in Kaduna State. The state government is already providing free health services for pregnant women, children under five years and the elderly. The proposed scheme is designed to widen the net of coverage, and ensure that all residents of the state, including the poor and vulnerable, have access to healthcare without incurring out-of-pocket expenditure. The Kaduna State Executive Council on Monday, 26th September...

Video: Olamide – Owo Blow

Multi-talented artiste Olamide, whom become well known for his hit back to back since 2009 till date, Baddosneh turns up for all the dancers out there with the brand new compelling music video for his August-released single “Owo Blow. Olamide says “My music is different and it’s real. I don’t try to copy anyone, and I’m only going to spread a positive message while having fun doing it”. Check out the hitmaker’s new video below, Clarence Peters Shot It!” AUDIO DOWNLOAD Watch...

I did not ‘bomb’ Buhari – Tinubu

A National Leader of the All Progressives Congress, Asiwaju Bola Ahmed Tinubu, has denied a media report that he “bombed” President Muhammadu Buhari. Some posts had on between Monday and Tuesday quoted Tinubu as having taken on Buhari following his face-off with the National Chairman of the APC, Chief John Odigie-Oyegun. He was quoted to have made snide remarks about the President, including the fact that Buhari begged him to emerge president. But in a statement by the Tinubu Media Office, the...

Jose Mourinho reveals why he may be forced to drop Wayne Rooney again

Rooney could be left out of Manchester United’s Europa League starting lineup after Jose Mourinho claimed he needs to “protect” the striker. Rooney was dropped for last Saturday’s rout of Leicester and has not trained fully this week due to a back injury. The England captain returned to training today at Carrington and United manager Mourinho will discuss whether he should start against Ukraine side Zorya Luhansk or be on the substitutes’ bench. But Mourinho is mindful that the endless debate over...

Rivers rerun: Police must be apolitical – Wike tells AIG

Rivers State Governor, Nyesom Wike has advised the Police High Command to take urgent steps to weed out bad eggs from the force. Governor Wike made the call at the Government House in Port Harcourt during a courtesy call on him by the AIG, Abubakar Marafa of Zone Six. Governor Wike observed that the bad eggs in the police structure negatively affected the implementation of security measures. He assured the Zone 6 Police Command of the continued support of the Rivers State...

Education Reforms: How a Nigerian State is Blazing the Trail

Kaduna State is reputed as having the third oldest University in Nigeria and the only Aviation Technology Institute in West Africa. This is in addition to the fact that the state is home to at least 2 other Universities, 2 Polytechnics, 6 Colleges of Education and 4 Research Institutes that focus on diverse fields from water to leather and agriculture to health. The presence of these institutions has helped the State build a reputation as being...

Stop addressing Ize-Iyamu as Pastor, he’s a pathological liar – Oshiomole

The Governor of Edo State, Adams Oshiomhole, has berated the Peoples Democratic Party, PDP candidate in the ongoing governorship election in the state, Osagie Ize-Iyamu, for claiming to be a pastor. Addressing reporters, the Governor described Ize-Iyamu, who is his former campaign director, as a “pathological liar”, who “lies effortlessly”. Oshiomhole stressed that the PDP flag bearer is not worthy of being addressed as a pastor for alleging that some All Progressives Congress, APC, governors, including Akinwunmi Ambode of Lagos and...

Edo election: Female police officer arrested for collecting bribe from PDP chieftain

A female police officer who was caught by an agent of the APC while collecting money from a chieftain of the PDP at unit 28, ward 7 in Ikpoba Okhai LGA was arrested by APC supporters who handed her over to the police.   The female police officer was locked up at Ugbekun police station after her action caused a little tension in the polling booth.

Army denies Boko Haram hoisted flags near Chibok

The Nigerian Army has refuted the report that Boko Haram insurgents have hoisted flags in some communities near Chibok, Borno State. A statement by the army spokesman, Col. Sani Usman, said the troops of the Operations Lafiya Dole are maintaining a high level of vigilance in and around the area to forestall infiltration by the terrorists. The British Broadcasting Corporation (BBC) had yesterday reported that the insurgents hoisted their flags in three villages in northern Borno, after over-running the area. The report...

Inconclusive elections: Senate to probe INEC’s performance

The Senate has resolved to investigate the performance of the Independent National Electoral Commission (INEC) in the last one year, while calling on President Muhammadu Buhari to immediately nominate suitably qualified persons to fill vacant positions in the commission. The decision followed the adoption of a motion on the matter co-sponsored by the Deputy President of the Senate, Senator Ike Ekweremadu and the Senate majority leader, Senator Mohammed Ali Ndume, against the backdrop of the spate of inconclusive elections conducted...

FG needs to spend less, earn more, borrow way out of recession – Obasanjo

Former President Olusegun Obasanjo on Tuesday made a number of recommendations to the federal government as the surest way of getting out of the current economic downturn, saying that the government needs to spend less, earn more, and borrow its way out of the recession. Obasanjo spoke in Abeokuta, the Ogun State capital, yesterday at the National Council on Finance and Economic Development (NACOFED) conference with the theme: “Enhancing Revenue Generation and Obtaining Best Value for Money in Expenditure”. The former...

Jibrin explains why he shunned Ethics Committee hearing

The former Chairman of the House of Representatives Committee on Appropriation, Abdulmumin Jibrin has given reason for his absence at a hearing on his alleged breach of House Rules by the Committee on Ethics and Privileges. Jibrin told newsmen on Tuesday that he shunned the panel because the Chairman, Nicholas Ossai had demonstrated bias in words and action. His words: “Ahead of the resumption of the House I wrote a 17-page letter to all members and one of the issues I...

Buhari, Tambuwal, APC Governors Move To Quell Tinubu, Oyegun’s Rift

President Muhammadu Buhari has endorsed a move by Governor Aminu Tambuwal and two other governors to settle the dispute between All Progressives Congress, APC national leader, Asiwaju Bola Ahmed Tinubu and national chairman, Chief John Odigie-Oygeun. A meeting between the peace envoys and the two men will, however, not hold until weekend at the earliest, sources in the party told Vanguard. The delay it was learnt was to enable the party give full attention to the Edo State governorship election...

APC Crisis: Atiku backs Tinubu

A former Vice President and chieftain of All Progressives Congress, Atiku Abubakar, has charged the party to promote the rule of law and due process in the conduct of its affairs, noting that they were germane to its unity and stability.He gave the charge in a statement on Wednesday against the background of the festering crisis trailing the conduct of the APC gubernatorial primary in Ondo State.   A former governor of Lagos State and national leader of the APC, Bola...

Sad! DJ Midas is Dead

Popular Disc jockeys in Ebute Metta, Ibadan Street, Lagos DJ Midas is dead! Sources said DJ Midas, whose real name is Michael Adedoyin, died after a brief illness yesterday Tuesday September 27th. Shortly before his death, DJ Midas worked with Silverbird’s Rhythm FM. He joined the radio station in 1998 as a pioneer and regular DJ host. He was 45. Siverbird Rhythm has confirmed the death, with a statement released on their official...

Mary J. Blige Asks Judge’ To Rule Prenup With Ex Husband As Valid’

Singer Mary J. Blige is determined to make her estranged husband abide by a prenuptial agreement she insists is solid. The 45-year-old filed for divorce from Martin 'Kendu' Isaacs in July citing irreconcilable differences after 12 years of marriage. Now, according to TMZ, she's asking a judge to rule that the prenup that sets out what each takes away from the marriage is valid. The gossip website reports that Blige is...