By Michael Eboh

The Nigerian Extractive Industries Transparency Initiative, NEITI, in its recent report indicted the NNPC for withholding and short-changing the country of over $13.29 billion over a nine-year period. NEITI in its Audit Report for 2013, had accused the NNPC and its subsidiaries of failing to remit $3.8 billion and N358.3 billion in 2013, and over $12 billion between 2005 and 2009, stating that these outstanding payments were due from unpaid consideration from divested Oil Mining Leases (OML), cash call refunds, crude oil liftings and Nigeria Liquefied Natural Gas, NLNG, dividends over a nine-year period.

In addition to the indictment by NEITI, the NNPC had been accused on a number of occasions of large scale graft, and serving as a conduit for the diversion of the country’s finances to private account. The NNPC had also been accused of entering into deals that were detrimental to the economy of the country among others.

In particular, former Chairman of NEITI, Professor Humphrey Asobie, had accused past presidents of the country of participating in corruption in the oil sector, through connivance with some officials of the NNPC. According to him, almost all leaders of the country from 1973 had been indicted of one form of malfeasance or the other in the petroleum sector by various reports.

He also accused political parties of complicity in the rot in the petroleum industry and other sectors of the economy, stating specifically, that over the years, the Nigerian National Petroleum Corporation, NNPC, had been a source of funding for political parties. According to him, the NNPC had been the source of funding for political parties all along and where they are not getting from NNPC, they are getting from other sources.

In addition, the Natural Resource Governance Institute, NRGI, recently disclosed that within the first six months of the Buhari administration, the NNPC withheld over $4.2 billion, about N824.7 billion, out of a total of $6.3 billion, about N1.24 trillion, realised from crude oil sales in the second half of 2015.

The NRGI also accused the NNPC of causing the country to lose about $32 billion, about N7 trillion, due to its opaque Domestic Crude Allocation (DCA), questionable revenue retention practices and corruption-ridden oil-for-product swap agreements. Former Governor of the Central Bank of Nigeria and present Emir of Kano, Sanusi Lamido, had also accused the NNPC of failing to remit about $20 billion to the Federation Account. These are just a few of the many accusations against the NNPC in the last three years.

However, the NNPC, in an attempt to clear its name, denied any wrongdoing, claiming that its failure to remit about $13.294 billion to the Federation account over a nine-year period was due to the fact that the funds were utilized legally in running its operations, while the balance of the funds had been transferred to the Central Bank of Nigeria.

Mr. Godwin Okonkwo, Group General Manager, Debt Management/Federal Allocation of the NNPC, told newsmen that a large chunk of the funds, with the approval of the Federal Government, were used to fund various gas projects in the country, while with the advent of the current administration, the balance of the funds had been moved from the Treasury Single Account, TSA, to the federation account in the Central Bank of Nigeria, CBN.

According to him, part of the spending for NLNG dividends was for the development of NLNG trains, Brass LNG and Olokola LNG. On claims that the NNPC and NPDC are yet to pay about $1.7 billion from the transfer of some oil assets to the NPDC, he stated that the actual amount would be determined by the Department of Petroleum Resources, DPR, which is currently at the last lap of evaluating the amount to be paid.

Stakeholders are of the view that if all the leakages caused by the NNPC are blocked, and if all the outstanding sums allegedly withheld by the NNPC are recovered, the country’s present financial predicament would take a turn for the better. It has also become pertinent for the ongoing reforms in the NNPC to be pursued to a logical conclusion, to position the NNPC on the path to transparency.

Stakeholders are unanimous in their views that forestalling further  loss of the country’s resources through the NNPC should be seen as a national priority, hence, the Petroleum Industry Governance Bill, presently before the national Assembly, should also be expedited to save the country from further loses in the petroleum industry.