$8.3 billion: NNPC holds Nigeria to ransom

Nigeria’s state oil firm owes the government $8.3 billion for the period from 2009 through 2011, an audit report said Friday, in the latest sign of gross malpractice in Africa’s top oil producer. All the oil firms that operate in Nigeria, including giants Shell and ExxonMobil, participated in the audit carried out by the Nigerian Extractive Industries Transparency Initiative (NEITI), which began last March.
“The audit report also reveals that NNPC (Nigerian National Petroleum Corporation) owes 1.305 trillion naira ($8.3 billion, six billion euros) to the federation account as at December 31, 2011,” NEITI’s chief Ledum Mitee said in statement.
Mitee heads the national chapter of the global EITI, chaired by former British cabinet secretary Clare Short.
Mismanagement and allegations of corruption have long dogged the NNPC. And the corporation is now believed by critics to be behaving as if it is the boss of the Nigerian government, doling out crumbs, after it has made illegal deductions, at source.
President Goodluck Jonathan sacked ex-managing director Austen Oniwon in June, in a move aimed “to achieve greater transparency and accountability in government,” according to a statement issued at the time.
Mitee told AFP on Friday that the audit does not offer any conclusions as to why these funds went unpaid, even though NNPC was given ample opportunity to explain the issue.
“NNPC has its members on our panel… They participated in the audit,” he said.
“We sent it to them before publication in case they have any comments, but… we have not received their comments. Maybe their own comments could explain why those monies have not been paid,” he added.
NNPC spokeswoman Tumini Green did not answer several phone calls on Friday.
The audit found that over the three-year period $143.5 billion was paid into the Nigeria’s national account.
The audit found that NNPC owed the government $4.84 billion in funds linked to the natural gas sector over the 2009-2011 period.
That was in addition to $3.996 billion owed in similar circumstances in audit reports from previous years, it said.
It was not immediately clear if the amount was included in the $8.3 billion debt listed elsewhere in the audit, and Mitee was not immediately available for a detailed discussion of the findings.
The audit also found that NNPC consistently violated procedures in Nigeria’s controversial fuel subsidy programme.
The state firm, itself a fuel importer, is required to follow the same procedures as private companies when submitting subsidy claims.
But NNPC has been paying itself subsidy fees without submitting those claims for verification, the audit found, noting the firm’s subsidy earnings increased 186 percent between 2009 and 2011.
Jonathan tried to scrap the graft-riddled subsidy programme last year, but the move sparked a wave of strikes and protests by those who saw the scheme as their only benefit from the nation’s oil wealth because it keeps pump prices low.
Jonathan was forced to partially re-instate the subsidy.