IS THE NNPC ABOVE THE NIGERIAN LAW?
The Nigerian National Petroleum Corporation (NNPC) pocketed N1.65 trillion of government funds between 2009 and 2011; and to date has not remitted or accounted for the sum, a study by the National Assembly Budget and Research Office says.
While the federal government complained about lack of funds for important projects within the period, NNPC made a surplus of more than N2 trillion within the period but paid nothing out of the excess to the government as required by law, the report says.
The Fiscal Responsibility Act (2007) requires a part of surpluses made by ministries, departments and agencies, to be transferred to government’s central account – the Consolidated Revenue Fund.
The amount raised by the NNPC was only part of its operational surplus, which should have been paid into the government’s coffers as Internally Generated Revenue. The amount would have been enough to fund more than half of the entire 2009 budget, which was less than N3 trillion.
WASTED SURPLUS
But with the federal government’s attention for years fixed on oil revenues, such large sums, which could pay for several important projects, are usually left with respective agencies, who misuse them, the report states.
The government too did nothing about the NNPC’s refusal to send the money, and in total, lost more than N12 trillion of internally generated revenue from all government agencies within the period.
“The monies are in respect of NAPIMS earnings,” the report stated. “This figure does not include the crude oil sales that were expected to have been paid in the federation account. It remains puzzling that the NNPC has not remitted any amount to the treasury.”
The National Petroleum Investment Management Services (NAPIMS) is one of NNPC’s 12 subsidiaries created in 1988.
The 12 subsidiaries cover business units, covering the entire spectrum of oil operations: exploration and production, gas development, refining, distribution, petrochemicals, engineering, and commercial investments.
NAPIMS, which generates the most money for the NNPC, earned N9.58 trillion between 2009 and 2011, and accumulated a surplus of N2.07 trillion – that is excluding proceeds from crude oil and gas.
The law requires that a fraction of the surplus – in this case N1.65 trillion – be transferred to the government.
“Hence, the NNPC ought to have remitted the sum of N1.65 trillion to the consolidated Revenue Fund of the federal government,” the report stated.
The funds were never remitted.
The study, carried out with collaboration from the Federal Public Administration Reform Programme Nigeria (FEPAR), said the NNPC retained N338.26 billion, N572.22 billion and N746.17 billion that were due to the government in 2009, 2010 and 2011 respectively.
The amount totalled N1.65 trillion for the three years.
The NNPC claimed it transferred the amounts to a “revenue reserve”. The corporation has not since remitted the money, and there are no records of how they were spent.
According to the findings, the NNPC said it could not pay the money because it incurred losses.
The corporation claimed that although NAPIMS recorded significant surpluses during the period, the NNPC as a “group”, including other subsidiaries, recorded deficits during the period and as such could not make remittances.
Others on the bandwagon
Another agency that withheld their operating surpluses was National Pension Commission.
The report concluded that “many of the agencies do not see the need to make contributions to the federal government. Agencies such as NDIC, NSPMC easily point out that they do not receive subvention from the government, even though all the agencies were established with money invested by the government.NNPC
The MINT argued that, like other incorporated companies, it pays dividends to the shareholders whenever profits generated in the year are substantial enough.”
NNPC reacts
When contacted, spokesperson for the NNPC, Umar Farouk, dismissed the calculations as incorrect.
“The National Assembly’s calculation was not correct,” he said. “We have made this point repeatedly clear that the NNPC is not supposed to make remittances to the government because we do not have the money.
Whatever money we make is reinvested into the running of our operations because the NNPC does not receive any budget or subvention from the government. This has been a running concern for us, and we are hoping the National Assembly will do something and remove the NNPC from that list.”
Credits: Telegraph
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