Onyekakeyah: NNPC and Jonathan’s self audit

THE submission to President Goodluck Jonathan, the other day, of the long-awaited forensic audit report on the activities of the Nigerian National Petroleum Corporation (NNPC) is historic in the annals of crude oil revenue management in Nigeria. An alleged missing $20 billion led to the investigation. The development is historic in the sense that it marks a turning point in the running of the NNPC. This might herald a new era, if the behemoth called NNPC could henceforth be subjected to periodic auditing. For, never in the history of the corporation has a sitting president or Head of State allowed the NNPC to be probed and or audited under its watch. Not even when a government left office was a probe permitted, except in one or two cases. 

    For instance, a similar probe was carried out in 1992, when the Pius Okigo panel investigated the oil windfall that accrued from the Gulf War, and found that $12 billion was frittered away under the Babangida administration. There was also the Abisoye Panel report of 1995 that identified areas of wastage including subsidy. The Petroleum Revenue Task Force Committee headed by Nuhu Ribadu probed fuel subsidy disbursements following the nationwide mass protest of January, 2012. 

   The Idika Kalu Committee on Refineries conducted a high-level assessment of the nation’s refineries and recommended ways of improving their efficiency and commercial viability. Finally, the Dotun Sulaiman Committee on Governance was tasked with designing a new corporate governance code for ensuring full transparency, good governance and global best practices in the NNPC and other oil industry parastatals. There is no doubt that Nigerians placed high hopes on these committees, if only they could unearth the inherent problems plaguing the oil industry and chart a new path that would benefit Nigerians. But that expectation has never been realised.

   By this action, therefore, President Jonathan has done what no other president/Head of State has done. This is laudable and commendable. We should acknowledge this fact and count it as a positive development for Nigeria in the war against corruption. The president has cleared his name. No one would come up in the future to say that $20 billion was missing under the Jonathan administration. The template for accountability in Nigeria’s oil industry has been set by this action. It is recommended to future governments.

   If every sitting government allows the NNPC to be probed/audited while it is in power, there would be less allegations of mismanagement in the corporation. Besides, allegations of “missing” funds in the corporation would be minimized. And if Nigeria could plug all the cracks through which billions are frittered away, the country would have made progress in the anti-corruption campaign. The oil industry is the epicenter of corruption in Nigeria because all the funds that are being shared by all manner of people, including various arms of government, departments and agencies, come from the NNPC. The NNPC has been made the livewire of Nigeria.

   While receiving the report, which, among other things, required the NNPC to refund $1.48 billion (not $20 billion as alleged), to the Federation Account, President Jonathan promised to swiftly implement its findings to satisfy the yearnings of Nigerians. 

   Among other things, the report found that the gross revenue generated from crude oil lifting for the period January 1, 2012 to July 31, 2013 was $69.34 billion and not $67 billion as reported by the Reconciliation Committee. Out of this amount, the total cash remitted into the Federation Account was $50.81 and not $47 billion as reported by the Reconciliation Committee. The balance of the revenue was applied to operational costs, including PMS and DPK subsidies of $8.7 billion, leaving $1.48 billion net amount attributable to the Federation Account. 

   However, the NNPC said it was not indicted by the audit carried out by PricewaterhouseCoopers (PwC), an internationally acclaimed accounting firm. According to the Group Managing Director of the NNPC, Joseph Dawha, the investigation over the alleged missing $20 billion oil money, did not indict the corporation in anyway. Dawha said the report “has clearly vindicated our long held position that the alleged unremitted crude oil revenue was a farce from day one.” On remittances of proceeds from crude oil sales into the Federation Account for the contentious period of January 1, 2012 to July 31, 2013, the NNPC boss said “the PwC Forensic Audit report was clear that NNPC remitted $50.81billion out of a total of $69.34billion.”

    My concern here is not whether or not the NNPC was indicted but the fact that the investigation was carried out in the first place. That a sitting president allowed this probe to be carried out is tantamount to self audit. This is the critical issue, the most important thing to Nigeria. President Jonathan could have refused to permit the audit just as past administrations did. What is not clear is whether or not the N30 trillion allegations, being traded between the former CBN Governor, Chukwuma Soludo and Minister of Finance, Ngozi Okonjo-Iweala is part of the alleged missing $20 billion or a different one. If it is, then, the matter has been resolved. If not, maybe, another forensic audit might be required to dig out the truth.

   When in 2014, the erstwhile Governor of the Central Bank of Nigeria (CBN), Sanusi Lamido Sanusi (now the Emir of Kano), raised the alarm that $49 billion was missing from the NNPC accounts, it was like the heavens were collapsing on Nigeria. The ripple effect was enormous. Members of the public seemed to believe the scathing allegation because it came from no other person than the Governor of the Central Bank of Nigeria. The international community capitalised on it to reiterate Nigeria’s acclaimed corruption status. Prior to that, however, Mallam Sanusi had found himself enmeshed in controversies for being loquacious and not fearing anybody. 

    For instance, among other things, Mallam Sanusi had in December 2010, disclosed that the federal legislators were gulping 25 per cent of the Federal Government overheads, which drew the ire of the lawmakers. They accused Sanusi of heating up the polity and summoned him to the chambers to clarify, defend, or retract his statement. But he was bold and defiant and insisted that figures don’t lie. But Government, through the Minister of Finance and Coordinating Minister of the Economy, Dr. Ngozi Okonjo-Iweala, insisted that no money was missing. 

   What I can say, at this juncture, is that neither Mallam Sanusi nor Dr. Okonjo-Iweala was to blame for their various positions. For, as I earlier said, nobody seems to know exactly the accounting procedures of the NNPC; not even the Finance Minister, the President or the CBN Governor knew. Everyone was speaking based on the information available to him or her. Only a forensic audit, as have been conducted, could reveal the truth about the inner workings of the NNPC. There is nothing else to add at this juncture.

     Nevertheless, the $49 billion allegation became the last straw that broke the camel’s back. Mallam Sanusi was summoned several times to the Senate Hearing Committee to clarify the figures. In the course of his presentations, the amount was scaled down to $29 billion and later to $10 billion, before it was hung on $20 billion. The inconsistency in the figures raised serious doubts, as people questioned why the CBN Governor could not be sure of his figures before making them public. That, in a way, eroded public confidence in the allegation. Mallam Sanusi was subsequently sent on suspension, from where he was edged out.

   It is unfortunate that the NNPC has always been in the eye of the storm. It has always been accused of mismanagement because its activities and accounting procedures are opaque. No one seems to know what is happening in the corporation except perhaps the people running it. The quantity of oil extracted, sold and the accruing revenue and how it is disbursed seem not to be totally known even to government. 

    When there is allegation of “missing” funds, like in the case of the $20 billion, the government finds itself in dilemma for not having all the facts. Unfortunately, it is the same government that is accused of “embezzling” the money. But I must add that government meddling in the affairs of the NNPC explains its involvement. For instance, between 1999 and 2007, a period of eight years, the then President Olusegun Obasanjo never appointed an oil minister but ran the portfolio by himself. The NNPC has no free hand to operate.

   All this exposes the corporation to ridicule.  Speculations are rife and you don’t blame the public for raising questions. The way out is to restructure the NNPC, which is partly what the Petroleum Industry Bill (PIB) seeks to achieve. Some people have called for the scrapping of NNPC, which to me is nihilistic. You don’t cut off the head because you have headache. Restructuring to make the NNPC operate as business is a better option.