Jacob Segun Olatunji and Kolawole Daniel write on the probe instituted by the leadership of House of Representatives, into the activities of the Nigeria National Petroleum Corporation (NNPC) on the alleged NNPC's indebtedness to the Federation Account, to the tune of N450 billion and the new figure of N842 billion thrown up by the Executive Secretary of the Nigeria Extractive Industries Transparency Initiative (NEITI).There was no doubt that Nigerians, who had been following the series of probes by the National Assembly into the activities of the Nigeria National Petroleum Corporation (NNPC), were, indeed, surprised by recent activities of the lawmakers. This is due to the fact that these actions, in the past, always turned out to be mere academic exercise or jamboree of sort. Going by this, the stakeholders in the oil industry must have thought that the House of Representatives was embarking on another wild goose chase when the leadership of the lower chamber of the National Assembly, led by Honourable Aminu Tambuwal, mandated the Joint Committee on Finance, Petroleum Resources (downstream and upstream) and Gas Resources to probe an alleged non-remittance of N450 billion into the Federation Account by the NNPC.Stakeholders had hoped things would take a different shape in the new probe, but to their amazement, there was a setback on the scheduled day that the probe was supposed to commence, owing to the failure of the Minister of Finance, Dr (Mrs) Ngozi Okonjo-Iweala, and her Petroleum Resources counterpart, Mrs Diezani Alison-Madueke, to appear before the investigative panel. Others who also failed to honour the invitation are the Accountant-General of Federation (AGF), Mr Ogunniyi Otunla, Director of the Department of Petroleum Resources (DPR), Executive Chairman of Federal Inland Revenue Service (FIRS), Mrs Ifueko Omoigui-Okauru and the head of the Nigeria Extractive Industries Transparency Initiative (NEITI), Mrs Zainab Ahmed.The resolution of the House of Representatives to probe the corporation was sequel to a motion moved by the Minority Whip, Honourable Samson Osagie, on the alleged NNPC's indebtedness to the Federation Account to the tune of N450 billion, a development, he noted, which stalled the monthly sharing of funds to the three tiers of government in the month of August. But with the absence of the key government figures before the panel, the committee subsequently postponed the public hearing till last Tuesday, to enable relevant and principal figures in the probe to attend and make presentations that would assist the panel in carrying out its work.Before the postponement, the Director, in charge of Policy Analysis, Research and Statistics in the Ministry of Petroleum Resources, Mr Emmanuel Idiagu, had informed the committee that the minister was out of the country, and that she sent her apologies. But the excuse was not well received by one of the co-chairmen of the panel, House Committee on Finance, Honourable Abdulmumuni Jibrin, who fumed that the committee was interested in the physical presence of the important figures, saying they should be able to respond to issues that may arise in the course of the probe.The chairman of the House Committee on Petroleum (Upstream), Honourable Ajibola Muraina, who equally condemned the poor attendance, said that the action of the ministers and other heads of parastatals was a clear demonstration of 'our inability to do the right thing at the right time', adding that elementary things which somebody failed to do, had led to the House to waste tax payers money and precious time in the name of public hearing. He said that the seventh National Assembly, especially the House of Representatives, was prepared to bell the cat by applying sanctions where and when necessary.In the same vein, Chairman, House Committee on Gas Resources, Honourable Bassey Ewa, and his Petroleum Resources (Downstream) counterpart, Honourable Dakuku Peterside, in their separate remarks on the development, berated the actions of the ministers and heads of parastatals for not honouring the lower chamber's invitation.Earlier, while declaring the investigative public hearing open, the Speaker, Honourable Tambuwal pointed out that, 'this exercise is pursuant to the regular oversight function of the legislature as entrenched under Sections 88 and 89 of the Constitution of Nigeria and, therefore, I will like to reassure all stakeholders and, indeed, the general public from the onset that no witch-hunt is intended. Note however that by the mandate of the House, the investigation shall be transparent and thorough.'When the probe finally took off on last Tuesday, it was revelations galore, as the first salvo came from the chairman of Revenue Mobilisation Allocation and Fiscal Commission, (RMAFC), Mr Elias Mbam, who disclosed that both the NNPC and the oil marketers, under the Petroleum Products Pricing Regulatory Agency (PPPRA), had illegally deducted the sum of N1.079 trillion for fuel subsidy between January and September this year.Mbam said that while the NNPC deducted N615.670 billion from January to September as against N81.720 billion payable to it, as contained in the Appropriation Act with a difference of over N5333.950 billion, the PPRA deducted the sum of N647.660 billion as against the approved N102.753 billion in the 2011 appropriation within the same period, with a difference of over N544.907 billion. He told the panel that the NNPC had actually admitted that it owed the N450 billion to the Federation Account between 2005 and 2008 out of which a refund of N15.2 billion, in two instalments, had been paid to the Federation Account, based on a repayment schedule worked out with the corporation.Mbam, while informing the committee that the account of the corporation was shrouded in secrecy which made it to attract criticisms, suspicion and lack of confidence by all stakeholders, said that at present, the J.P Morgan account, where the payments for export crude oil and gas paid, was largely not being supervised and constitutionally monitored by the major stakeholders of the Federation Account, especially the RMAFC. He also accused the NNPC of often applying an exchange rate regime that was different from the official rate approved by the Central Bank of Nigeria (CBN) in crediting the Federation Account, saying that the commission, through it analysis, had discovered that about N12 billion was the loss recorded between January and August this year due to the sharp practices.To this end, Mbam advised that to curb the trend, henceforth, the exchange rate, applicable to crude oil export, should also be applied to domestic crude and gas at the time of monetisation, while the NNPC should maintain a separate federation account for domestic crude oil and gas revenue. While canvassing for transparency and accountability in the activities of the NNPC as well as regular sharing of information and data with all relevant stakeholders, he pleaded that there should be regular forensic auditing of the joint venture accounts by the beneficiaries of the Federation Account.The RMAFC boss added that there was the need for the separation of the office Accountant-General of the Federation from the office of the Federal Government for transparency, adding that all the laws that established parastatals under the Ministry of Petroleum Resources, as well as other government agencies that were inconsistent with the Section 162 (1) of the 1999 constitution (as amended), should be amended to conform with the provision of the constitutions.Mbam, above all, advised that the commission should be given the power to manage the Federation Account on behalf of the beneficiaries, as it was the only neutral body that enjoyed the confident of the three tiers of government, while the local governments should also be brought on board in the operation of the Federation Account.However, the Group Managing Director (GMD)of the NNPC, Mr Austin Oniwon, admitted in an answer to a question put to him by a co-chairman of the committee, Honourable Ajibola, as to whether or not the corporation was owing the Federation Account N450 billion, that the corporation had started paying the debt under duress. He said, 'indeed under great duress, NNPC has started paying. We are paying under duress, but when the situation improves, we will revisit the force payment, it has not been easy'.When asked the source from which the corporation got the money to pay back, Oniwon said, 'we are not taking Nigerians' money to pay back Nigerians; we are paying from proceeds of our operations; in fact, we are sweating'.However, in a swift reaction to Oniwon's submission over the issue of repayment, a former GMD of the corporation, under whose tenure the debt was allegedly incurred, Mr Funsho Kupolukun, disowned the debt, insisting that the corporation was not owing any kobo as been speculated, saying that what happened was that there was a gap arising from cost of production and cost of sales to end users.At this stage, the Minister of State for Finance, Dr Yerima Ngama, took up the RMAFC boss over his claim that the NNPC account was shrouded in secrecy and wanted to know whether there was a time Mbam demanded any information about the joint venture account but was denied, accusing him of misinforming the committee.However, the RMAFC boss insisted that the account was shrouded in secrecy and that the commission ought to have access to it directly without having to come through either the NNPC or the Ministry of Finance when there was need for any information. The committee frowned at the comments of Ngama and directed him to withdraw his statement and as well to apologise to the committee for using un-parliamentary language which he immediately did.On the day allotted for the Nigeria Extractive Industries Transparency Initiative, (NEITI), its Executive Secretary, Mrs Ahmed, dropped a bomb shell, declaring that the NEITI audit report on the activities of the NNPC indicted the corporation of unauthorised and illegal deductions from crude oil proceeds accruable to the Federation Account between 2004 and 2008 to the tune of N842 billion, as against the reported N450 billion. Mrs Ahmed also disclosed that the fresh debt profile of the NNPC to the Federation Account was arrived at, based on documents supplied to it by the corporation in the course of its auditing between the periods under review. She alleged that, when the illegal deductions were discovered, NEITI demanded to know from the NNPC who authorised such deductions and whether there was a subsisting government circular to back it up, but the corporation refused to provide any authority to back up the deductions.The NEITI boss further disclosed that the agency discovered discrepancies in the accounts of the corporation in the proceeds of crude oil and the amounts remitted into the Federation Account during the course of its assignment. When reminded that Mbam had earlier told the committee that the NNPC was owing the Federation Account about N450 billion between the period under review while a former GMD of the corporation, Kupolukun, also denied that the corporation was not owing a dime, Mrs Ahmed faulted the claims.According to her, 'based on our auditing reports, the NNPC is owing the Federation Account to the tune of N842 billion as at 31 December, 2008; we have the details of what the NNPC is owing on a month-by-month basis and we are ready to provide the committee the necessary documents, if need be.'At this stage, the co-chairman of the session, Honourable Bassey Ewa, after consultations with other members of the committee on the next line of action following the revelation by the NEITI boss, gave her a later date to submit all relevant documents that would assist the committee at getting into the root of the matter.On the exchange rates being used by the NNPC for the payment of domestic crude oil proceeds which had short-changed the Federation Account with about N12 billion differential within the last nine months, Mrs Ahmed confirmed the development, saying that the Federation Account was at disadvantaged and that henceforth, the prevailing rates must be paid at the point of transaction and not deferring payment.In her recommendations to the committee, Ahmed proposed that adequate measures must be put in place by the government to restrict any unauthorised deductions from the crude oil proceeds, while the NNPC should also increase the frequency of sweeping the proceeds into the Federation Account so as to avail the federation of available funds at all time. Mrs Ahmed further recommended that the federation should make efforts to collect the amounts due to it, but not yet paid by the corporation.Meanwhile, the representatives of the Nigerian Governors' Forum (NGF) and Commissioners' of Finance Forum, invited by the committee to come and substantiate their claims that illegal deductions were being made from the Federation Account, failed to show up. Speaking on their absence, the co-chairman of the panel, Honourable Ewa, frowned at their lukewarm attitude over the invitation extended to them, based on their allegation against the NNPC, saying that such an attitude was not in the best interest of the nation.During the panel's probe, a mild drama played out on at one of the sittings, specifically on Thursday, November 3, as aggrieved members of the committee staged a walk out over perceived sell-out on the part of the headship of the committee. It, however, took the timely intervention of the House leadership before the hearing could continue, as the situation nearly generate to a free-for-all by the aggrieved members who suspected foul play.The Speaker, who was presiding at the plenary, had to hurriedly dispatched a delegation, led by the Deputy Minority Leader, Honourable Suleiman Kawu Abdurrahaman, to calm the situation and as well summoned the co-chairmen presiding over the hearing. All these played out in the presence of invited dignitaries, includingthe Minister of Petroleum Resources, Mrs Deziani Alison-Madueke; Minister of State for Finance, Mr Yerima Ngama, among others, as the probe was halted temporarily.The walk out was sequel to the insistence of Mrs Ahmed that the NNPC, without authorisation, illegally deducted N842 billion from crude oil proceeds accruable to the FederationAccount between 2004 and 2008, as against the reported N450 billion earlier claimed. Trouble started when one of the co-chairmen of the committee, Honourable Ajibola, questioned the rationale behind the new figure of N842 billion presented to the committee by the NEITI boss as against the reported N450 billion. This development did not go down well with some members of the committee, which made them to shout 'point of order, point of order, point of order...'.After peace was restored, Honourable Ajibola debunked the insinuations made by his colleagues, saying, 'let us be conscious of history. I don't play anyone's game. How can you say my question is out of place''. But the representatives of the Speaker, Honourable Kawu, after restoring order, had to stay back to monitor the proceedings of the hearing.At the resumed hearing, the NEITI boss presented a 15-page document, detailing the agency's audit report that indicted NNPC over the illegal deductions, amounting to N842 billion as at December 31, 2008. The Minister of Petroleum Resources, however, failed to address the new figure of N842 billion threw up by NEITI boss as the actual money the NNPC was suppose to be remitted into the Federation Account. She, rather, said that 'it will be of benefit, if government agencies are interacting'.When a question was posed to the minister by some members of the committee as to why the NNPC budget was not an appropriated budget, she said, 'a national oil company like NNPC cannot depend on Federal Government appropriated budget. You cannot run the oil industry on Federal Government budget. It is highly capital intensive'.In his own submission, however, the GMD of NNPC, Mr Oniwon, declared that the corporation did not owe the Federation Account any money as being alleged and did not withhold remittance to the same account. The GMD said that the corporation did not willingly agree willingly to owe the Federation Account the controversial N450 billion, saying that 'the N450 billion was a reimbursement to NNPC which, today, is now being christened a debt. It was actually incurred by the NNPC for petroleum products supplied to Nigerians, when there was no subsidy regime in the country. We agreed to pay the N450 billion to allow the peace to reign in the country because of the controversies the issue had generated in the recent time,' he said.On the issue of N842 billion raised by the NEITI that NNPC was owing Federation Account, Oniwon debunked the claim, saying it was a misrepresentation of facts by NEITI which the committee should thoroughly investigate. He also debunked the allegation that about N12 billion was kept back by the NNPC on the differential conversion of exchange rate on payment for domestic crude oil as alleged by NEITI and pleaded with the committee to use all within its powers to unravel the mystery surrounding the N12 billion difference.He lamented that both the N450 billion and the fresh N842 billion alleged debt had dented the image of the corporation before its business associates and the international community who were no longer willing to do business with the corporation because of the allegations.Speaking, the lead chairman of the committee, Honourable Jibrin, and others emphasised that the committee was not out to witch-hunt anybody or organisation on the ongoing probe into the alleged N450 billion, but to get into the root of the matter. Jibrin, who said that the committee would take time to study the documents presented by the NNPC in its defence, said that the GMD and his team would have to come back at a later date to face the committee.He said that the corporation would provide concrete fact before the committee to convince it beyond reasonable doubt for the committee to clear itof all the allegations levelled against it.rem,ained to be seen if the House lkeadership would, indeed, address the issue in accordance with the rule of law.
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