How Senate Committee Came Up With Findings For $49.8 Billion Allegedly Missing...

How Senate Committee Came Up With Findings For $49.8 Billion Allegedly Missing From NNPC

By Vanguard on June 4, 2014
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marafa Senate Amaechi PDP Senators
File Photo: Nigerian Senate Floor

WHEN the letter he had earlier secretly written to President Goodluck Jonathan in December 2013, intimating the president of the sum of $49.8 billion allegedly missing from Nigeria’s oil proceeds, leaked to the public, the then Central Bank of Nigeria, CBN, Malam Sanusi Lamido Sanusi was hailed by many even as others immediately dismissed his allegation, saying he was playing the script of certain elements to derail the federal administration.

In the letter, Sanusi alleged that the Nigerian National Petroleum Corporation, NNPC, failed to remit more than two-thirds of the oil money earned by the country between January 2012 and July 2013, insisting that out of the sum of $67 billion, only about $18 billion  had so far been accounted for, while the sum of $49.8 billion was unaccounted for.

Those who dismissed Sanusi’s claims, believed that the then CBN boss had come up with the claim as a strategy to divert public attention from then ongoing investigation into his alleged shady deals by the Financial Reporting Council of Nigeria, FRCN, among which was his financial recklessness coupled with his perceived imbalance in donations to states and institutions.

The Senate was drawn into the issue during one of its plenary by Senator Olubunmi Adetunmbi, APC, Ekiti North, who raised a Point of Order on Matter of Urgent Importance under the Senate Order 42 that the Red Chamber look into the allegation he considered grave to be overlooked.
Adetunmbi drew the Senate’s attention to newspaper reports alleging that the money was proceed from the sale of crude by the NNPC.

Proceeds from sale of crude
He said the laws stipulated that proceeds from the sale of crude should be lodged in the CBN and requested that the Senate should institute a probe into the alleged missing funds.
According to him, the apex bank has written that the funds are accruals that are not remitted from January 2012 to July 2013 by the NNPC.

Adetunmbi said: “There has been a raging debate on the issue of missing money from the coffers of the Federal Government of Nigeria. Today, all newspapers carried the report on 49.8 billion dollars that has not been remitted to the federation account. As a parliament, this is a very grave issue.”

The lawmaker noted that the parliament owed it a duty to the public to ensure that “we get to the bottom of this issue”.
Senate President, David Mark, who presided over the day’s affairs, said since the details of the matter were not before the Senate, it would be difficult for senators to consider it instantly as a matter of urgent importance.

He said the matter would be referred to the Senate Committee on Finance for further investigations to enable it to avail the Senate details of the matter, rather than relying on newspaper reports.
Mark therefore referred the matter to the committee and directed it to report back to the plenary in less than seven days.

Minutes after Senator Mark made this remark, in what seemed unsatisfactory to them, the All Progressives Congress, APC, senators assembled journalists for a press conference, where they urged the Senate leadership to get to the root of the matter.

Led by Senate Minority Leader, George Akume, the senators said the CBN source on the alleged missing funds was authentic and should not be doubted.

Akume who read a prepared speech at the conference, said the APC senators were determined to ensure that the matter was given the urgent attention it deserved because ”We have been told and we have every cause to believe that this money is missing, this document is coming from the CBN. It is an authentic source.

“We are determined to follow it to the fullest and we want you to join us in doing so. One of our responsibilities is to identify with the people by ensuring that those of us who are charged with higher responsibility conform to very high standard expected of people in public office,” he insisted.

Shortly after the committee was inaugurated, it held a number of public hearings where all the parties connected in the issues raised by Sanusi appeared to either submit memorandum or testify orally . The committee was not done with the public hearings it held on Thursdays in February, March and April, as it sought the services of forensic experts to examine the financial records of the NNPC and the one earlier submitted by the then CBN Governor.

There was anxiety over the expected report of the committee, especially given that over six months after holding a public hearing, the committee was yet to release its report. But the committee, headed by Senator Ahmed Makarfi, PDP, Kaduna North, at last tabled the report last Wednesday.

Before appearing before the Makarfi –led committee, the Federal Ministry of Finance, the  CBN, the Federal Inland Revenue Service, FIRS, the NNPC, the Nigeria Customs Service, NCS, as well as the Department of Petroleum Resources ,DPR, met at various times to reconcile the differences.

Reconciliatory meeting
The reconciliatory meeting, according to Sanusi arrived $12 billion as the missing funds. But the Minister of Finance,  Dr. Ngozi Okonjo-Iweala, who still disagreed, saying the amount reached stood at $10.8 billion even as she said the reconciliation was an ongoing thing and not basically because of Sanusi.

But when he appeared before the Senate committee in February, Sanusi, who was then still at the helm of affairs at the apex bank, gave a new figure of $20 billion. He introduced a new issue by  accusing the NNPC of operating illegal kerosene subsidy, saying contrary to the president’ letter directing stoppage of the subsidy.

He said that while some funds had been accounted for, the sum of $20 billion remained outstanding. The Senate committee asked him to submit his written presentations, which he did. But he was promptly tackled by the Group Managing Director of the NNPC, Mr. Andrew Yakubu, who insisted that contrary to claims that the subsidy on kerosene was illegal, the Federal Government never asked the corporation to terminate kerosene subsidy.

Allegations by Sanusi
But in its reports submitted last week before the Senate, the Makarfi-led committee denied that the alleged sum of $49.8 billion or $20 billion were missing just as it said the allegations by Sanusi had no roots. The 73-page report  said: “There was never any unremitted $49.8 billion. The total crude oil liftings from January 2012 to July 2013 was $67 billion and not $65 billion as the CBN Governor had presented.

“The committee could not see how the figure of $49.8 billion was arrived at by the CBN Governor in the first instance. That the CBN Governor at the first hearing had put forward the figure of $12 billion as money to be reconciled and changed his position to $20 billion at subsequent hearing. At the conclusion of his written submission, he (Sanusi) posited that it could be $20 billion, $12 billion, $10.8 billion or anything in between.

“The CBN Governor orally or in writing never outrightly submitted that monies were missing but that monies were not remitted to Federation Account by the NNPC.”

Even as it said it had not rounded off its assignment due to the pending forensic examination,the committee however, said there was the need for the NNPC to incorporate its spending on kerosene subsidy in the national budget, noting that while the subsidy on petrol was budgeted for, that of kerosene, though spent by the NNPC with evidence,  was not budgeted for in the nation’s yearly plan.

The Makarfi-led committee report equally found that gross liftings under the Third Party Financing was $2,430,750, 973 out of which share for Federation Account was $1,588,242,004. It indicated that the Auditor General of the Federation (AGF) confirmed and gave documentary evidence showing the sum of $1,370,172,650.36 was remitted to the Federation Account. It therefore asked the NNPC to remit the balance of $218,069,354.32  to the Federation Account.

The Senate Committee on Finance therefore tasked the NNPC to refund and remit to the Federation Account, the sum of $262 million being expenses it could not satisfactorily defend of Holding Strategic Stock Reserve; Pipeline Maintenance and Management Cost and Capital Expenditure.

“Royalties and taxes amounting to $447,817,884 being outstanding Federation Account share from the US $6.815 billion listings by NNPC on behalf of NPDC remains unremitted.

It further states: “NNPC should not pay for their operational expenditures direct from Federation fund without appropriation by the National Assembly;  NNPC should strictly adhere to international best practices in keeping records, “it noted. “NNPC should not control the revenue account of NPDC in order not to undermine its separate legal status and make accountability more difficult,”it added.

It suggested that further legislative action by the Senate should be taken after the receipt of the forensic audit report being undertaken by foreign auditors. The committee, in its wisdom, given the outcry over the existing fuel subsidy, and the complaint from the Federation Accounts Allocation Committee, FAAC, recommended the removal of petroleum subsidy, saying it is contrary to reasons adduced during its formation, it was draining the nation’s economy.

The Senate committee’s report surprised a number of people, especially opponents of the Minister of Petroleum, Mrs. Diezani-Alison Madueke, and the management of the NNPC as it neither indicted the minister nor the corporation.

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