• Main News
  • About Us
  • Contact
Premium Times Opinion
Monday, August 15, 2022
  • Home
  • Democracy and Governance
    • Bámidélé Upfront
    • Jibrin Ibrahim
    • Okey Ndibe
  • Economy
    • Ifeanyi Uddin
  • Issues of the Day
    • Adeolu Ademoyo
    • Aribisala on Tuesday
    • Dele Agekameh
    • Pius Adesanmi
  • Politics
    • Ebeneezer Obadare
    • Femi Fani-Kayode
    • Garba Shehu
    • Hannatu Musawa
    • Zainab Suleiman Okino
  • Guest Columns
  • Faith
    • Article of Faith
    • Sunday Ogidigbo
    • Friday Sermon
    • Elevated Sight
  • Home
  • Democracy and Governance
    • Bámidélé Upfront
    • Jibrin Ibrahim
    • Okey Ndibe
  • Economy
    • Ifeanyi Uddin
  • Issues of the Day
    • Adeolu Ademoyo
    • Aribisala on Tuesday
    • Dele Agekameh
    • Pius Adesanmi
  • Politics
    • Ebeneezer Obadare
    • Femi Fani-Kayode
    • Garba Shehu
    • Hannatu Musawa
    • Zainab Suleiman Okino
  • Guest Columns
  • Faith
    • Article of Faith
    • Sunday Ogidigbo
    • Friday Sermon
    • Elevated Sight
No Result
View All Result
Premium Times Opinion
Home Opinion

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

by Ogala Emmanuel
February 7, 2014
Reading Time: 6 mins read
0

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!

Share this:

  • Tweet
  • Email
  • Print
  • More
  • Pocket
  • Share on Tumblr

Related

Previous Post

Africa, the Begging Continent, By Olúfémi Táíwò

Next Post

Human Trafficking Expose: PREMIUM TIMES, Critics and the Limit of Falsehood

Related Posts

Zamfara Gold As Commonwealth, By Zailani Bappa
Opinion

Sheikh Gumi, Governor Matawalle and the Sands of Time, By Zailani Bappa

February 2, 2021
June 12 As Democracy Day Needs To Be Reconsidered, By Bashir Tofa
Opinion

The Need To Act Now To Stop the Ethnic Conflagration!, By Bashir Othman Tofa

February 2, 2021
Kofi Annan: In Service of the World, By Ejeviome Eloho Otobo & Oseloka H. Obaze
Opinion

Biden’s Likely Policy Orientation Toward Africa, By Ejeviome E. Otobo and Oseloka H. Obaze

February 2, 2021
Agenda for ‘Born Again’ JAMB and TETFUND, By Tunde Musibau Akanni
Opinion

Oyeweso, A Celebrated Historian, Ascends the Sixth Floor, By Tunde Akanni

February 2, 2021
Before Nigeria Burns, By Akin Fadeyi
Opinion

Is President Buhari Presiding Over the Last United Nigeria?, By Akin Fadeyi

February 2, 2021
On A Soyinka Prize In ‘Illiteracy’, By Biko Agozino
Opinion

Obasanjo: Only Those Who Did Not Do Well Went Into the Military, By Biko Agozino

February 1, 2021
Next Post

Human Trafficking Expose: PREMIUM TIMES, Critics and the Limit of Falsehood

2015: What Do Nigerians Want? By Gimba Kakanda

Editorial

  • EDITORIAL: The Urgency of Tackling Nigeria’s Second Wave of COVID-19

    EDITORIAL: The Urgency of Tackling Nigeria’s Second Wave of COVID-19

  • EDITORIAL: Unearthing the Cogent Lessons In the NESG-CBN Economic Policy Imbroglio

    EDITORIAL: Unearthing the Cogent Lessons In the NESG-CBN Economic Policy Imbroglio

  • EDITORIAL: COVID-19: Calling On Nigeria’s Billionaires and Religious Leaders To Step Up

    EDITORIAL: COVID-19: Calling On Nigeria’s Billionaires and Religious Leaders To Step Up

  • EDITORIAL: Bichi Must Go; Buhari Must Halt Slide Into Despotism

    EDITORIAL: Bichi Must Go; Buhari Must Halt Slide Into Despotism

  • EDITORIAL: The Flaws In Governor Emefiele’s Five-Year Plan For Central Bank of Nigeria

    EDITORIAL: The Flaws In Governor Emefiele’s Five-Year Plan For Central Bank of Nigeria

Subscribe to our Opinion articles via email

Enter your email address to get notifications of new opinion articles as they are published.

Join 526,543 other subscribers

Most Popular

  • The Bad Consequences and Dangers of Adultery and Fornication (Zina) In Islam, By Murtadha Gusau
    The Bad Consequences and Dangers of Adultery and Fornication (Zina) In Islam, By Murtadha Gusau
  • Are We All Biafrans?, By Abdul Mahmud
    Are We All Biafrans?, By Abdul Mahmud
  • Islam and the Conditions For Marrying More Than One Wife, By Murtadha Gusau
    Islam and the Conditions For Marrying More Than One Wife, By Murtadha Gusau
  • You Will Be Held Responsible On What Happened To Your Children!, By Murtadha Gusau
    You Will Be Held Responsible On What Happened To Your Children!, By Murtadha Gusau
  • The Qualities of a Good Leader In Islam, By Murtadha Gusau
    The Qualities of a Good Leader In Islam, By Murtadha Gusau
  • World Teachers Day and The Position of Teachers In Islam, By Murtadha Gusau
    World Teachers Day and The Position of Teachers In Islam, By Murtadha Gusau
  • The Women Prohibited For Men To Marry In Islam, By Murtadha Gusau
    The Women Prohibited For Men To Marry In Islam, By Murtadha Gusau

Like us on Facebook

Like us on Facebook

Podcasts

Advertisement

Advertisement

Advertisement

  • Main News
  • About Us
  • Contact

© 2022 JNews - Premium WordPress news & magazine theme by Jegtheme.

No Result
View All Result
  • Home
  • Democracy and Governance
    • Bámidélé Upfront
    • Jibrin Ibrahim
    • Okey Ndibe
  • Economy
    • Ifeanyi Uddin
  • Issues of the Day
    • Adeolu Ademoyo
    • Aribisala on Tuesday
    • Dele Agekameh
    • Pius Adesanmi
  • Politics
    • Ebeneezer Obadare
    • Femi Fani-Kayode
    • Garba Shehu
    • Hannatu Musawa
    • Zainab Suleiman Okino
  • Guest Columns
  • Faith
    • Article of Faith
    • Sunday Ogidigbo
    • Friday Sermon
    • Elevated Sight

© 2022 JNews - Premium WordPress news & magazine theme by Jegtheme.

This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.