How NNPC, Other Revenue Generating Agencies ‘Short Changed’ FG N8.13trn

A recent report by financial audit firm, KPMG, has indicted the Nigerian National Petroleum Corporation (NNPC) and other revenue generating agencies in the country of short changing the Federal Government of a staggering N8.13 trillion.

This was revealed during Thursday’s National Economic Council (NEC) meeting which was presided over by Vice President Yemi Osinbajo at the State House.

Speaking after the NEC meeting to journalists, Gombe State Governor, Ibrahim Dankwambo, said a total of N526 billion and $21 billion was under-remitted to the federation account between 2010 to 2015.

According to Dankwambo, the findings were made after KPMG’s forensic audit of accounts of some revenue generating agencies in the country.

“KPMG presented the report of the technical audit of RGAs concluding that a total sum of N526 billion and USD$21 billion was under-paid to the Federation Account,” said the governor.

“NEC’s Ad-hoc Committee chaired by Gombe State Governor with members including Governors of Edo, Kaduna, Akwa Ibom, Lagos and the Finance Minister recommended refund of the amounts under-paid.

“Council adopted the presentations and reports of the KPMG and the recommendations of its Ad-hoc Committee including a resolution to identify instances where there appears to have been criminal infringements and forward such to the Attorney-General of the Federation and the Legal Committee of the National Economic Council for further action.

“Council resolved to pursue strengthening of the NNPC governance structure to prevent further recurrence of such gross under-remittance by the NNPC and other RGAs,” he said.

The governor, who is the chairman of NEC Adhoc committee on remittances, said the findings have prompted the NEC to extend the forensic audit of the agencies to June 2017.

“One of the resolutions of NEC today is to extend the audit to June 2017. So the audit will continue for the remaining agencies. It is NNOC, NPDC, DPR, Customs, Federal Internal Revenue Services, NPA, Maritime Authorities, all the revenue generating agencies and the details of the infringement are contained in the report. Because it is voluminous report there are a lot of items that are there.

“The most important decision that was taken is that a sub-committee will be set up which will be an arm of the legal committee of NEC that will look into details of these kinds of infringements and make sure that those issues that are criminal and require prosecution will be handled by office of the Attorney General of the Federation,” said Dankwambo.

He identified agencies that were indicted in the KPMG report as the Nigerian National Petroleum Corporation, NNPC; Federal Inland revenue Service, FIRS; Nigeria Customs Service, NCS and Nigerian Ports Authority, NPA.

Others are Nigerian Maritime Administration and Safety Agency, NIMASA; Nigerian Communications Commission, NCC; Central Bank of Nigeria, CBN; Department of Petroleum Resources, DPR; Nigerian Petroleum Development Company, NPDC and several others.

Speaking also after the NEC meeting, the Governor of Zamfara State, Abdulaziz Yari, revealed that the Council discussed briefly the payment of petroleum subsidy by the NNPC.

“The item was brought up for discussion but it was referred back to the sub-committee on remittances in which I’m chair. We are doing the nitty, gritty with NNPC in terms of remittances. Don’t forget that the reason we got it right in 2016 on the NNPC side was because the oil prices were too low. It was easy for everyone to get fuel into the country and then make their profit. So, when the price started jacking up then the marketers started adjusting back because they needed to have a template of cost recovery and how they are going to make up the difference from the pump price to the landing cost of what they are importing,” said the Zamfara governor.

Yari, who is the Chairman of Nigeria Governors Forum, said: “Our problem is the volume, the quantity of consumption which is not acceptable. Working with the governors, so many decisions were taken but by next month, we are going to adopt that position either for the governors to take responsibility for the subsidy in their states based on the consumption or we look at other ways. For instance, if you say we paid N800 billion subsidy, you will ask who are we paying the subsidy to? And if you look at infrastructure development and capital programme of the federal government, it is about N1.1 trillion, almost 70 percent of what you are spending developing the economy. If there is no infrastructure development then you cannot talk about development of the economy. N800 billion is a huge amount that we must look at it, who is benefiting from it.

“So we are coming up with a strategy, we are going to meet in the month of May and June. By next meeting, we will definitely come up with a position of the government at both level of volume of what is being brought into the country and what the state and federal government collaborate to check.”

In her submission to the Council, Finance Minister, Mrs Kemi Adeosun, said the Excess Crude Account stands at N1,830, 682, 945.30 as of May 14, 2018, adding that the balance of the Stabilization Account stands at N 15, 725,456,963.83 currently. Mrs Adeosun put the current balance in the Natural Resources Development Fund at N116, 104,644,763.39 as of May 14, 2018.