7 February 2014

Nigeria: Senate Probes Sanusi Over N138 Billion Intervention Fund

The Senate has concluded arrangements to institute an indepth probe into alleged extra-financial dealings in the Sanusi Lamido Sanusi-led Central Bank of Nigeria (CBN), running into about N138billion.

Already, senators have been put on notice of an impending motion listed in the notice papers for deliberation at a date no further than two weeks from now.

The motion, which is to be sponsored by Senator Ita Enang (PDP, Akwa Ibom) is titled "Mobilising Non-Oil, And Generating Oil Dependent Revenue Into The Federal Treasury Through Fiscal Responsibility by Adherence to Statutory Mandate and Due Process In The Conduct of Public Procurement".

The lawmaker specifically singled out the Central Bank of Nigeria among all the agencies that fall within the purview of the Fiscal Responsibility Act, saying the apex bank had awarded and is still in the process of awarding projects from its operating surplus, instead of paying such sums into the Consolidated Revenue Fund to be appropriated by the National Assembly.

The CBN, he alleged, has within the last three years committed about N50billion as intervention in tertiary institutions in the education sector alone, not considering intervention in the health sector, hospitality and tourism among others. These projects, according to him, include projects above N1billion.

In the motion, Enang is praying the Senate to grant the following:

"Mandate the Senate Committees of Finance, Judiciary Human Rights and Legal Matters, to conduct a public hearing on the loss of revenue into the Consolidated Revenue Fund of the Federation through evasion of the Fiscal Responsibility Act, acting against and beyond the mandate given by law to the agencies, breach and evasion of public procurement laws and regulations, among others, and in general, for the purposes of determining:

"If and whether the funds spent by the agencies listed in the Fiscal Responsibility Act is the 20% of their operating surplus, and if it so be, where the 80% of their operating surplus were paid into and when.

"If the committal of funds by the Agencies are for projects and programmes within the core mandate or in any manner ancillary to the purpose for which they were each set up, etc.

"If and whether these Agencies are by the provisions of the Public procurement Act bound to submit their procurement to the Bureau of Public Procurement to consider, vet and issue a certificate of No Objection or otherwise before public procurements are consummated.

"By way of peer review, to compare the actions and expenditures of the Central Bank of Nigeria, Nigerian National Petroleum Corporation, Nigeria Ports Authority and other Agencies listed in the Fiscal Responsibility Act with such Treasury or Central Bank of other countries, National Oil Companies of other countries such as United States of America, United Kingdom, Germany, Canada, France, Australia and generally equivalent institutions of other countries and conclude if such institutions in those countries operate in the manner that Nigeria's do.

"To determine if, and whether, the Fiscal Responsibility Commission as presently constituted should not be dissolved and appropriately reconstituted with responsive constituents."

The senator further informed that the Senate noted that, "Whereas the 1999 Constitution of the Federal Republic of Nigeria (as amended) provides in Section 80 (1) as follows: All revenues or other moneys raised or received by the Federation (not being revenues or other moneys payable under this Constitution or any Act of the National Assembly into any other public fund of the Federation established for a specific purpose) shall be paid into and form one Consolidated Revenue Fund of the Federation.

"Whereas the Fiscal Responsibility Act in Section 21 has provided that all government agencies and corporations as listed in the schedule to the Act cause to be prepared and submitted to the Minister their Schedule estimates of revenue and expenditure for the next three financial years who shall cause same to be compiled and submitted along with the Appropriation Bill to the National Assembly.

"Whereas the said Act provides in Section 22 (1) and (2) and 23 (1) as follows:

22. Operating surplus and general reserve fund

1) Notwithstanding the provisions of any written law governing the corporation, each corporation shall establish a general reserve fund and shall allocate thereto at the end of each financial year, one-fifth of its operating surplus for the year.

2) The balance of the operating surplus shall be paid into the Consolidated Revenue Fund of the Federal Government not later than one month following the statutory deadline for publishing each corporation's accounts.

23. Classification of corporation operating surplus

1) The corporation's surplus be classified as a Federal Treasury Revenue

"Whereas the Public Procurement Act in Section 3 (1) establishes an agency known as the Bureau of Public Procurement;Whereas the Public Procurement Act provides in Section 15 that the provisions of the Act shall apply to all procurement of goods, works, and services carried out by

1. The Federal Government of Nigeria and all procurement entities;

2. All entities outside the foregoing description which derive at least thirty-five percent of funds appropriated or proposed to be appropriated for any type of procurement described in this Act from the Federation share of Consolidated"

The motion is already listed and could be taken up when the Senate resumes. The CBN governor had in the past rebuffed every entreaty by the National Assembly to have their budget vetted. On several occasions Sanusi had cited the provisions of the Fiscal Responsibility Act and in most cases, insisted that it was only the board of the CBN that had the statutory powers to appropriate for him.

NNPC Faults Sanusi's Inconsistent Figures over Missing Oil Revenue

The management of the Nigerian National Petroleum Corporation (NNPC) has expressed disappointment over the inconsistency of figures by the governor of the Central Bank of Nigeria (CBN) Sanusi Lamido Sanusi, over the alleged unremitted oil revenue.

This is even as the NNPC pointed out that as the supplier of last resort, it is the only company supplying kerosene in Nigeria for the benefit of citizenry as it owes a duty to Nigerians to ensure that there are adequate products in the country.

The development was sequel to Sanusi's sudden change of the figure of unremitted oil revenue at the public hearing of the Senate Committee on Finance last Tuesday from $12 billion to $20 billion.

In a statement made available yesterday the NNPC stated that Sanusi's inconsistency and display of ignorance over oil revenue streams remittance was "worrying especially as it is coming from an agency of government charged with managing the financial affairs of Nigeria."

At a recent joint press briefing held by the Minister of Finance and Coordinating Minister of the Economy, the Minister of Petroleum Resources, the CBN Governor and heads of DPR and FIRS, the initial figure of $49.8 billion said by Sanusi to be missing was reconciled to $10.8 billion.

But the NNPC stated that , "In his presentation before the Senate Committee on Finance, the CBN's figure changed again. This time CBN alleges it is now $20billion. This is a clear indication of CBN's inconsistency, thereby presenting conflicting figures to the generality of Nigerians.

"We are concerned by the dynamics of the moving numbers as the CBN's figures keep changing. This is a worrying trend coming from an agency of government charged with managing the financial affairs of Nigeria".

According to CBN, it is instructive to note that the $20billion is made up of $12billion subsidy claim, $6billion NPDC gross revenue and $2billion third party revenue.

But the NNPC maintains that the fact that the CBN accepted its submission with respect to $16billion royalty and PPT payments into the federation account through the FIRS indicates that the CBN cherry picks the figures.

For example, the corporation said, "In taking the entire $6billion gross revenue accruable to NPDC and allocating same to the federation account, the CBN simply multiplied the gross production by the crude oil price; thereby failing to account for the operating costs (opex) and amortized capital expenditure that underpin the production. In other words, the CBN failed to take into account the cost of production."

"We reiterate that NPDC has been remitting the royalty and Petroleum Profit Tax, PPT to the Federation Account. NPDC as a subsidiary of NNPC operates a business model similar to other international companies in Nigeria and abroad and will continue to be governed by these global best practices in the execution of these assets," the statement read further.

On the subsidy claim on kerosene, the Corporation insists that having accomplished the mandate without question in the past four years, it deserve to be commended rather than battered, for ensuring adequate supply of kerosene at regulated price of N50.00k.

"NNPC cannot be held responsible for any differential pricing from non NNPC retailers. This is the basis for NNPC's claim on kerosene subsidy," the statement added.

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