HomeBusinessNigeria's National Petroleum Corporation Spent Trillions Illegally

Nigeria’s National Petroleum Corporation Spent Trillions Illegally


Nigerian National Petroleum Corporation Spent Trillions Illegally
The Abuja HQ of NNPC

AFRICANGLOBE – Nigerian National Petroleum Corporation (NNPC) spent nearly half of the money it earned in three years and remitted the other half to the federation account, it was revealed yesterday.

The corporation earned N8.1trn from crude oil sales from 2012 to 2015, withheld N3.8trn and paid only N4.3 trillion to the national treasury.

Officials of the corporation revealed these facts themselves while briefing members of the National Economic Council yesterday at the Presidential Villa, Abuja.

They also said that former Minister of Finance and Coordinating Minister for the Economy Ngozi Okonjo-Iweala spent $2.1bn from the Excess Crude Account (ECA) without the approval of NEC.

The governor of Edo State, Adams Oshiomhole, disclosed these while briefing State House journalists on the outcome of the four-hour meeting.

President Muhammadu Buhari had inaugurated the National Economic Council chaired by Vice President Yemi Osinbajo.

Oshiomhole said the NNPC and the office of the Accountant-General of the Federation were compelled to brief the council on Buhari’s instruction.

Oshiomhole said if there had been transparency, the NNPC alone could not have spent N3.8trn in three years and remitted only N4.3 trillion to the entire three tiers of government.

“This is the first time we had a National Economic Council meeting in which under the instruction of the president the NNPC and the office of the Accountant-General of the Federation were compelled to provide information in black and white on issues as they relate to the total sales of Nigeria’s crude from 2012 to May 2015.

“This has never happened before and for us, this is profound. We are talking about transparency, we are talking about change.

“And what we saw from those numbers, I believe that Nigerians are entitled to know, is that whereas the NNPC claimed to have earned N8.1trn, what NNPC paid into the federation account from 2012 to May 2015 was N4.3 trillion.

“What it means is that NNPC withheld and spent N3.8 trillion. The major revelation here is that the entire federation, that is, the federal government, the states and all the 774 local governments, the amount the NNPC paid into the federation account for distribution to these three tiers of government came to N4.3 trillion.

“… NNPC alone took and spent N3.8trn; which means the cost of running NNPC is much more than the cost of running the Federal Government.

“That tells you how much is missing, what is mismanaged and what is stolen. These are huge figures. We need to earn and spend, it is basic law in accounting that even if you run a cigarette shop where you sell Three-Rings, you don’t sell and spend.

“You sell, take to your bank account and you budget for your procurement including cost of running your business.

You Can’t Spend Without Budgeting

“There is no enterprise manager who goes to the market, sells and just begins to spend; otherwise nobody needs to budget.

“And because you’re running a democracy and you’re running three tiers of government and the resources involved belong to these three tiers of government, the only lawful way decreed by the constitution, this is not an administrative regulation, it is not a policy derivable from a circular, this is from the express letter and spirit of the Nigerian Constitution as amended, that for example, if NNPC needs to spend money, it is obliged to prepare its budget like every other business enterprise, that budget will be scrutinized by the executive and forwarded to the National Assembly and the National Assembly will accordingly appropriate it. “If the federal government cannot spend without appropriation, why should any agency spend without appropriation?

“NIMASA for example, whatever they earn, they’re supposed to pay into federation account and also present the budget of their requirement. “This is what the constitution provides for. And this is what President Buhari has promised to do, that henceforth, all monies must go to the federation account. What do you need budget for?

“Nigeria cannot continue with you-earn-the-money-and-spend-it way. Where is transparency? Where is the role of the National Assembly?

“So, if you are doing that, you won’t have a situation where the NNPC alone will spend N3.8 trillion and remit to the federal, states and local governments N4.3 trillion which means NNPC is taking about 47 percent. And that explains all the leakages we’re talking about. Let us also be clear, nobody says that parastatals should not spend money, but they must return to budgeting.

“There is no major player; there is no major registered private company that will spend money without a budget.

“Even a private company, you’ll have your board of directors looking at your revenue, total sales, your turn-over, your personnel cost, and running cost, visible and invisible and you have the budget for the year.

“That is how every sensible business runs. That is the way it was when President Buhari was Minister of Petroleum. So, we’re not reinventing the wheel. That’s the way it used to be and that’s the way the constitution says it should”.

Okonjo-Iweala Spent $2.1bn From ECA Without Approval

Nigeria Is On The Rise, Don't Talk It Down - Okonjo-Iweala
Okonjo Iweala

Oshiomhole said from the presentation by the Director of Funds in the Office of the. Accountant-General of the Federation Mr. M. K. Dikwa on the comprehensive management of the Federation Account, the NEC discovered that former Minister of Finance Ngozi Okonjo-Iweala spent $2.1bn from the Excess Crude Account (ECA) without the council’s approval.

He said after deliberations on ECA, the council resolved to constitute a four-man committee comprising the governors of Gombe, Kaduna, Edo and Akwa Ibom States to look at te management of the ECA/Federation Account and report back its recommendation to the council.

“We looked at the numbers for the Excess crude account. The last time the Minister of Finance and Coordinating Minister of the Economy reported to the council, and it is in the minute, she reported by November 2014 that we had $4.1 billion, but today (yesterday), the Accountant-General Office reported we’ve $2.0 billion which means the Honourable Minister spent $2.1bn without authority of the NEC.

“And that money was not distributed to states, it was not paid to the three tiers of government. This is why the NEC has set up a panel to look at what accrued, what it was spent for, when and by whom so that Nigerians will have the full picture of all the transactions as regards the much talked about excess crude”.

Many States Unable To Pay Salaries – el-Rufa’i

Kaduna State Governor Nasir el-Rufai said though the committee raised to look into the management of ECA was not given a timeframe, it would carry out its duties quickly in view of the inability of states to pay salaries.

“As you can imagine, state governments are under pressure, many of our state governments are unable to pay salaries on time without recourse to borrowing. So this is very important to us. This is an all governors committee; we wear the shoes we know where it pinches. So we’re going to do this as quickly as possible. The next meeting of the council is on July 23rd. We hope to complete our work and be in position to report to the council on that day. So, within the next one month, we’ll be done by God’s grace”, he said.

Recalling how former President Olusegun Obasanjo initiated ECA, el-Rufai said: “I was part of the decision that led to the creation of the Excess Crude Account. It was administrative arrangement to save for a rainy day. And it was meant to have very clear accountability such that every state and local government in a particular state knows their balance in the Excess Crude Account. Though you can’t spend it, but you know how much of it is yours. That was the arrangement.

“And in those days, before we spend any money from the Excess Crude Account, the federal and states governments will meet and agree. That’s how we agreed to build the seven power stations which is NIPP today. It was from Excess Crude Account. And we also met and agreed to build the Lagos-Kano Standard Guage Rail Line from the Excess Crude Account. But what we’ve seen in the last few months or years is that ECA was operated unilaterally by the federal government, drawings were made unilaterally without consulting those that actually own the money.

“The ECA is 52 percent owned by the federal government and 48 by the state and local governments…The other thing the committee will do is to look at the operations of the federation accounts particularly the shortfall and again come back to council with very clear recommendations as to what to do”.

Earlier, the chairman of the Nigeria Governors Forum, Abdulazeez Yari of Zamfara State said the Federal Government, in conjunction with the CBN, would look inwards to see how much to give states to help them pay outstanding workers’ salaries.


By: Isiaka Wakili

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