This Day (Lagos)

Nigeria: Sanusi Allegations and Damage Done to Nigerian Economy

analysis

The dismissal of the allegation of non-remittance of oil revenue by the Nigerian National Petroleum Corporation (NNPC) to the government coffers, raised by the former Central Bank of Nigeria’s governor Mallam Sanusi Lamido Sanusi, by the report of the Senate Committee on Finance may have doused the tension raised by the allegation. Stakeholders in the nation’s economy however said the harvests of inconsistency and the eventual repudiation of the allegation has done a lot of damage to the Nigerian economy.

The heated controversy generated by a damning allegation of opaque practice at the Nigerian National Corporation (NNPC) simmered last week after the Senate Committee on Finance, which investigated the alleged $49.8 billion unremitted oil revenue had, a week earlier, submitted its report to the Senate, clearing the NNPC and the Petroleum Resources Minister of the allegations. For the former governor of the Central Bank of Nigeria, Mallam Sanusi Lamido Sanusi, whose whistle blowing exercise had triggered off a chain of probes and reconciliatory sessions among various federal government parastatals, the repudiation of his allegations by the Senate Committee on Finance was another blow, having lost his job in a futile confrontation with his principal. In its report, which was laid on the floor of the Senate, the committee stated in the report that it could not see how the former CBN Governor arrived at the figure of $49.8 billion, said to be missing at the initial stage. The committee also accused Sanusi, of jumping to hasty conclusions and generating false allegations against the nation's oil corporation.

Sanusi had in September 2013 alleged that the NNPC was indebted to the national treasury to the tune of $49.8 billion unremitted oil revenue from the various transactions it carried out from January 2012 to July 2013. The sheer weight of the allegations had prompted the Senate Committee on Finance, through the resolution of the Red Chamber at its plenary session in December 2013 to launch an investigation in order to ascertain the veracity or otherwise of Sanusi's claims. Interestingly, quite a number of people who were initially drawn into the controversy by the media coverage of the probe of the allegation of faulty rendition of accounts by the NNPC expressed their frustration over the inconsistencies in the claims of the former governor of the apex bank.

Eventually, the Senate report indicated that the panel, during the course of investigations, could not see how Sanusi arrived at the alleged figure of $49.8 billion. The committee also observed that the unfounded nature of Sanusi's allegations was evident in his submissions which reflected gross inconsistencies that it described as "misleading and incorrect."

The Report The report said: "That the CBN governor at the first hearing had put forward the figure of $12 billion as monies to be reconciled and changed his position to $20 billion at subsequent hearing. At the conclusion of his written submission, he posited that it could be $20 billion, $12 billion, $10.8 billion or anything in between." According to the panel, "The CBN governor only posited that part of $.6 billion, representing the value of oil lifted by NNPC on behalf of the Nigerian Petroleum Development Corporation (NPDC), should belong to the federation account and that he was not in a position to say how much was the amount. Therefore, the assumption that the entire sum of $6 billion was to be accounted for is incorrect and misleading."

The panel stated for the record that all the agencies, which included the CBN, the NNPC, Ministry of Finance, and Ministry of Petroleum Resources, had agreed after a reconciliation meeting that $47 billion out of the $67 billion had been credited to the federation account, and the amount to be accounted for, therefore, was $20 billion. The committee said, "The sum of $5.254 billion PMS subsidy certified by the Petroleum Products Pricing Regulatory Agency (PPPRA), part of the $20 billion to be accounted for was adequately covered by the Appropriation Acts 2012 and 2013." To avert this kind of confusion, the committee recommended that inter-agencies reconciliation meetings amongst sensitive economic institutions such as Ministry of Finance, NNPC, CBN and Federal Inland Revenue Service (FIRS) should be done on a regular basis in order to avoid similar episode.

However, the Senate Committee on Finance has asked the NNPC to refund the $262 million into the federation account, since in the opinion of the committee; the corporation could not satisfactorily defend it. The report also said the total kerosene subsidy paid but not appropriated for by the National Assembly between 2012 and 2013 was $4.430 billion. The committee said that the amount might exceed this figure because certification by the Petroleum Product Pricing Regulatory Agency (PPPRA) for the period was interim. On the expenditure incurred by the corporation on subsidy which was not captured by the Appropriation Act, the committee advised President Goodluck Jonathan to prepare and present to the National Assembly supplementary budget to cover the expenditure of the sum of N90.6 billion for PMS (premium motor spirit) subsidy in 2012 and the sum of N685.910 billion for kerosene subsidy expended without appropriation by the National Assembly.

Dissenting Voices As far as the Chairman of the Senate Committee on Finance, Alhaji Ahmed Makarfi and a member of the committee, Senator Bukola Saraki are concerned, the report of the committee that made nonsense of Sanusi's allegation notwithstanding, it would be too hasty to conclude that the report of the committee would be the final one on the controversies surrounding the allegations because certain recommendations in the report are interim. Makarfi said, since there is an on-going forensic audit on the issue, it was proper to wait for its outcome. "I will not want to say our report is the final report because certain recommendations in the report are interim. There is an on-going forensic audit and we said that will be subject to the outcome of the forensic audit. On his part, Saraki, who is also the vice-chairman of the Senate Finance Committee, faulted media reports, claiming that the committee had cleared NNPC of any unaccounted for revenue fund. Speaking through an aide, Saraki said, "The committee is yet to receive the report on the forensic audit and independent analysis on the subject clearly indicate we have a lot of grounds to cover in order to determine the level of culpability or otherwise of the agency on the alleged non-committal, so to suggest any clearance for anybody at this stage is out of the question."

Taking Nigerians for Granted Commentators on the report of the Senate Committee on Finance which was made public two weeks ago have expressed disappointment in the decision of the former CBN Governor to deliberately take Nigerian for granted by plunging the nation in a needless controversy, saying the report of the findings of the Senate committee has sufficiently put a lie to Sanusi's allegations In spite of the seeming crack in the wall of the Senate committee on this issue, analysts said until proved otherwise by the report of the forensic audit into the matter, the controversy generated by the allegation of the missing funds has done a lot of damage to the Nigerian economy. To members of the international community who have been monitoring the drama over the allegation, there is no doubt that it will take a while before the negative publicity which the allegation of the missing fund earned the country could be effectively shrugged off. What it means is that Nigeria's credibility is suspect given the weight of the allegations from Sanusi, who as the then governor of the central bank was supposed to be the custodian of information on the nation's finances. The inconsistencies in the allegations, it was argued, have portrayed the country as a society that lacks accountability. It has also presented Nigeria as a country where every aspect of the daily lives are politicised. According to an analyst who preferred to speak on the condition of anonymity, "At the opening of such hearings on December 18, indications that Sanusi's allegation might be a mere assumption emerged when he submitted that it was actually $12 billion that was missing and not $49.8 billion as earlier claimed. This attitude was in contrast with beliefs that a person who occupied an office of that magnitude must have ascertained his facts before making such allegation. The audience was shocked by this volte face. But it was more shocking when on that same day, Sanusi agreed with the Minister of Finance, Dr. Ngozi Okonjo-Iweala that the claim of missing $12 billion was also not correct but rather, it was $10.8 billion that was yet to be accounted for." Although the report of the forensic audit of the activities of the NNPC is still being awaited, informed commentators on financial matters said it will be unfortunate if the forensic report tallies with the interim report of the Senate committee as it will amount to a total waste of time and resources on the part of the former CBN Governor. "If at the end of the day the report of the forensic audit of the NNPC confirms the Senate committee report that there was no missing funds, then Nigeria will be viewed as a country where the entire country can be flagrantly taken for granted by public office holders. This is because resources have been deployed to the chain of probes over the matter," an oil industry analyst said. At the height of the controversy, the senate committee was compelled to assemble all stakeholders, including the Attorney General of the Federation, Mohammed Adoke, Auditor General of the Federation, Sam Ukura, and NNPC's subsidiary, Nigeria Petroleum Development Company (NPDC) in addition to the other party made up of ministers of finance and petroleum, CBN, NNPC and third party agents.

Pressure on Nigerian Oil Firms There are also indications that the needless controversy that trailed the allegations, counter-allegations and harvests of probes over the alleged non-remittance of the revenue to the nation's covers by the NNPC has begun to take toll on the operations of indigenous oil firms. "What many people failed to realise is that the politicisation of the issue of NNPC funds is putting the jobs of indigenous oil companies on the lines because our foreign partners are getting uncomfortable with such damning reports. It is unfortunate that the allegations, as shown by the report of the Senate Committee are baseless, the damage to the nation's image has already been done," chief executive of an indigenous oil services company said. He added, "Some of our foreign partners are not comfortable with the allegations of impropriety against the NNPC because of the international media coverage given the whole issue. It is very unfortunate that these kinds of spurious allegations were allowed to gain prominence in the media."

Ads by Google

Copyright © 2014 This Day. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 2,000 reports a day from more than 130 news organizations and over 200 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.