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Missing $50b Oil Revenue: When CBN Misinforms Nigerians

Suspended CBN Governor Sanusi Lamido Sanusi

By Chijama Ogbu

It is often surprising how Nigerians are easily taken in by spurious claims and allegations. The reaction of many Nigerians to the recent allegation by the Governor of Central Bank of Nigeria (CBN), Sanusi Lamido Sanusi, that the Nigerian National Petroleum Corporation (NNPC) kept away $50 billion of oil proceeds between January 2012 and this year fully underscores the gullibility of Nigerian public. By Sanusi’s allegation, the NNPC paid only 24 per cent proceeds into the Federation Account, and diverted or stole the remaining 76 per cent.

CBN Governor Sanusi Lamido Sanusi

CBN Governor Sanusi Lamido Sanusi

It is preposterous for anyone to believe such a claim. To start with, we have to credit even thieves with some sense. Even the most daring or daftest of all leaders will not just corner more than two-third proportion of a national wealth and spirit it into hidden accounts. In which bank will you hide such humongous amount?  To which country will you take such money? True, there is corruption in Nigeria, but no perceptible mind will fall for this kind of unsubstantiated claims.

Interestingly, the CBN governor a few days ago admitted mistakes in his claims. He said, after several meetings with the minister of finance, the minister of petroleum resources,  the Group Managing Director of the NNPC and acting Chairman of Federal Inland Revenue Service (FIRS) that the missing money is now $12 billion, not $50 billion as he alleged in his leaked letter to the President Jonathan.

The minister of finance, Dr. Ngozi Okonjo Iweala, has even countered the latest claim, saying that no money is missing and that the ministries and parastatals involved would trace the remaining $12 billion to appropriate revenue/expenditure files.  You can disagree with Okonjo-Iweala’s views, but you cannot impugn her integrity and expertise in financial matters.

Besides, the prompt reaction of the NNPC to the charge addressed the issue squarely. Its explanations appeared plausible. According to the corporation, the allegation is borne out of misunderstanding of the workings of the oil and gas industry and the modality for remitting crude oil sales revenue into the Federation Account.

It even went further to correct the figures bandied by the CBN in its letter to the president. The NNPC said that the figure of 594.024 million barrels of crude oil given by the CBN as the total crude oil lifting for the period of January 2012 to July 2013 does not represent the correct picture of crude oil lifting for the period. The correct figure it said is 618.55m barrels. This shows that the CBN understated the actual crude lifting by 4.13%, which by financial terms would amount to much.

By NNPC’s explanation, revenues from crude oil lifting are in various categories, namely  Equity Crude; Petroleum Profit Tax, Royalty, Third Party Financing and the Nigerian Petroleum Development Company, NPDC.

According to the corporation, revenues from each of these categories are statutorily collected by different agencies of the government. The NNPC collects only one of the aforementioned categories, namely Equity Crude. Petroleum Profit Tax is collected by the Federal Inland Revenue Service (FIRS), Royalty goes to the Department of Petroleum Resources (DPR); Third financing goes for Research, Development, Programme and Satellite fields Development, while NPDC goes to NPDC for upstream development.

While NNPC pays proceeds from Equity crude directly to the Federation Account with the CBN, the FIRS and DPR pay PPT and Royalty respectively into the Federation Account with the CBN. The sum total of these proceeds makes up the alleged unremitted revenues.

According to the state oil company, the 24% of total crude oil revenue receipts which the CBN governor acknowledged that NNPC remitted represents the proceeds from the equity lifting which NNPC is directly responsible for, while the alleged unremitted 76% was paid to the agencies that are statutorily empowered to receive them for onward remittance into the Federation Account.

This explanation arouses three critical questions. Since Sanusi and his team have been in charge at the CBN since 2009, how come that he is not aware of this operational structure etched clearly by the NNPC in its response? This structure has been in place for years. Was there any variation in the way the NNPC remitted revenue accretion to the Federation Account in the period in question from what it used to be?  What effort did CBN make to cross check with the NNPC before firing the memo to the President?

It is inconceivable that a central bank governor would be ignorant of such channels of revenue from the country’s main revenue earner – oil. The right thing it should have done was to seek clarification from relevant sister agencies before rushing to write President Jonathan and then go ahead to leak it. In fact, the president ought not to have come into this at all.

Back in 2002/ 2003, the Revenue Mobilisation, Allocation and Fiscal Commission (RMFAAC), headed then by Haman Tukur, alleged some underpayments by the NNPC under its former Group Managing Director, Mr. Jackson Gauis-Obaseki and later under Funso Kupoloti, which generated media attention for months. But NNPC through various presentations tried to explain itself. Although some gaps were established in their case ultimately, they were given opportunity to explain themselves all outside the direct involvement of the then President Olusegun Obasanjo.

The latest act of Governor Sanusi Lamido Sanusi is one of the many instances he openly raised issues against the government he is serving under . He may claim that he did not intend it to be leaked, but that is a tale for the marines. The NNPC’s Group Managing Director, Mr. Yakubu, in a response had imputed political motive to the action of the CBN governor. And that appears to be the only rational explanation to this shenanigan from an occupant of a key office in the country.

CBN Governor Sanusi Lamido Sanusi

CBN Governor Sanusi Lamido Sanusi

By writing this acerbic letter to Jonathan and allowing it to be leaked at the time he is facing political crisis, it appears that he just wanted to feed into the already raging fire and give political advantage to the president’s opponents. It is meant to further accentuate their wanton corruption going on under his watch. By his action, Sanusi makes himself susceptible of being part of the well-orchestrated agenda to stop President Goodluck Jonathan from running for the second. Their strategy appears to be to continue to ratchet up attacks from all corners until he is knocked off balance.
With such huge allegation turning out to be false, Sanusi ought to resign in shame. The responsibility of such highly esteemed office as CBN governor is that the occupant ought to be thorough and diligent.
In order climes, it is enough ground to resign or be fired.

Chijama Ogbu is a Lagos bases  Media Practitioner

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