CBN accuses NNPC of diverting $49.8b meant for Federation Account

By The Rainbow
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The Nigerian National Petroleum Corporation (NNPC) failed to remit a whopping $49.8 billion ( an amount more than Nigeria's annual budget) between 2012 and 2013, the Central Bank of Nigeria has said.

The apex bank made this disclosure in a letter of complaints sent to  President Goodluck Jonathan, which was scooped  SaharaReporters.

According to the report, the CBN in the letter complained to President Goodluck Jonathan about the continuing refusal of the NNPC to honour its legal obligations, including failure to remit $49.8 billion to the Federation Account between 2012 and 2013, which  represents 76% of the value of crude oil lifting during the period.

The letter is dated 25 September 2013.
CBN said in the letter, 'Our analysis of the value of crude oil export proceeds based on the documentation received from pre-shipment inspectors shows that between January 2012 and July 2013, NNPC lifted 594,024,107 barrels of crude valued at $65,332,350,514.57.

'Out of this amount, NNPC repatriated only $15,528,410,098.77 representing 24% of the value.  This means the NNPC is yet to account for, and repatriate to the Federation Account, an amount in excess of $49.804 billion of the value of oil lifted in the same period.'

The governor illustrated his facts with inferences from  an attached table of analysis of the crude oil lifting and repatriations as prepared by the CBN.

The banking sector regulator and banker to government, in the letter endorsed by its governor Sanui Lamido Sanusi, noted that the failure of the NNPC to repatriate the amounts constitutes not only a violation of constitutional provisions  but also of both Nigeria's foreign exchange and pre-shipment inspection of exports laws.

Also drawing attention to previous occasion in which he had expressed concern about what appeared to be shortfalls in remittances to the Federation Account in spite of the strong recovery in the price of oil, Mr. Sanusi said that a point of departure ought to be to insist that the NNPC account fully for all proceeds that were diverted from its accounts with the CBN and the Federation Account.

CBN further said, 'As an indicator of how bad this situation has become, please note that in 2012 alone, the Federation Account received $28.51 billion in Petroleum Profits and related taxes but only $1013 from crude oil proceeds.'.

'In the period January-July 2013, the corresponding figures are $16.65 billion and $5.39 billion, respectively.  This means, Your Excellency, that in the first seven months of the year, taxes accounted for 76% of the total inflow from this sector, while NNPC crude oil proceeds accounted for only 24%,' the apex bank said.

Mr. Sanusi specifically recommended to the President to:

Require NNPC to provide evidence for disposal of all proceeds of crude sales diverted from the CBN and Federation Account; Investigate crude oil lifting and swap contracts, as well as the financial transactions of counter-parties for equity, fairness and transparency; and Authorise prosecution of suspects in money-laundering transactions, including but not limited to BDCs who are unable to account for hundreds of millions of dollars. According to the report, it  is not certain  if Mr. Jonathan has read the letter.