MUCH energy is being wasted over the statement by Mr. Remi Babalola, Minister of State Finance, that the Nigerian National Petroleum Corporation, NNPC, was insolvent.

Professor Dora Nkem Akunyili, Minister of Information and Communications has said Babalola’s claims did not reflect the true position of the Corporation.

Babalola had told the Federation Accounts Allocation Committee, FAAC, that NNPC was unable to pay FAAC an outstanding N450 billion in unremitted crude oil receipts. Neither the statement, nor NNPC’s admission of its inability to pay was new. The debt had been outstanding for years and could have topped N450 billion.

“NNPC is insolvent as current liabilities exceed current assets,” Babalola told FAAC. “NNPC is incapable of repaying the N450 billion owed to the Federation Account unless it is reimbursed the N1.156 trillion (in subsidies) it has requested from the Federal Ministry of Finance”.

Professor Akunyili laboured to limit what government considered an embarrassment. “NNPC is not insolvent. Given the nature of NNPC, there are regular transactions between Federal Government and NNPC and as a result there are always outstanding balances between the Corporation and the Federal Government”.

Olusegun Aganga, Minister of Finance added, “We have so many different transactions between the NNPC and the Federal Government, in some form of the balances it maybe a daily balance and in another it may be a trade balance, you need to make all of these things up. If you are worried about NNPC that is a different matter”. 

None of the refutals said when the Federal Ministry of Finance would reimburse the NNPC. None mentioned the fact that the NNPC claims were still disputed, since they were unbudgeted expenses and grossly violated existing government financial regulations.

What is the whole panic about? If NNPC is not broke why does it not pay the N450 billion debt to FAAC? The issue is not NNPC’s financial status. It is about government’s flagrant abuses of the Constitution and support for its agencies like the NNPC to follow the bad examples.

The NNPC leads in refusing to remit earnings to the Federation Account.

Section 80 of the Constitution is explicit on the matter. (1) 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.

(2) No moneys shall be withdrawn from the Consolidated Revenue Fund of the Federation except to meet expenditure that is charged upon the fund by this Constitution or where the issue of those moneys has been authorised by an Appropriation Act, Supplementary Appropriation Act or an Act passed in pursuance of Section 81 of this Constitution.

(3) No moneys shall be withdrawn from any public fund of the Federation, other than the Consolidated Revenue Fund of the Federation, unless the issue of those moneys has been authorised by an Act of the National Assembly.

(4) No moneys shall be withdrawn from the Consolidated Revenue Fund or any other public fund of the Federation, except in the manner prescribed by the National Assembly.

Arguments that NNPC used the money to subsidise import of petroleum products or repair pipelines are obtuse. They do not absolve NNPC of spending unbudgeted money.

Worse still, the money in question belongs to the three tiers of government  federal, state and local government. NNPC as a federal government agency cannot spend money that belongs to other tiers of government, and not even federal money, if it is not allocated to it.

The panic over the financial status of the NNPC is a ruse to allow the Corporation to continue operating above the Constitution, as it has for years. The silence of the National Assembly attests to its acquiescence to the violation.

We are not worried about the NNPC. We are worried about government’s unwillingness to embrace transparency in its dealings.

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