Just
over a year ago President Goodluck Jonathan suspended me from my
position as governor of the Central Bank of Nigeria after I questioned
an estimated $20bn shortfall in oil revenues due to the treasury from
the state oil company. As I said then, you can suspend a man, but you
cannot suspend the truth. The publication last month of a PwC audit into
the “missing billions” brings us a step closer to it.
When I
was central bank governor I raised three broad questions. First, did
the Nigerian National Petroleum Corporation remit to the government the
entire proceeds of its crude oil sales? Second, if it did not, is there
proof of the purpose to which the unremitted amounts were applied? And
third, did NNPC have the legal authority to withhold these funds?
Contrary
to the claims of petroleum minister Diezani Alison-Madueke, the audit
report does not exonerate the NNPC. It establishes that the gap between
the company’s oil revenues between January 2012 and July 2013 and cash
remitted to the government for the same period was $18.5bn. And it goes
into detail about the NNPC’s account of how it used that money, which
raises serious questions about the legality of the state oil company’s
conduct.
The auditors say a significant part of the unremitted
funds is supposed to have gone towards a kerosene subsidy that had been
stopped two and a half years earlier by the late President Umaru
Yar’Adua. His decree never appeared in the official gazette, leading
some to question whether it ever had legal force.
Evidence
disclosed in the report suggests this is a sideshow. The executive
secretary of the agency charged with administering subsidies confirmed
that, acting on Yar’Adua’s orders, it had ceased granting subsidies on
kerosene. There was no appropriation for such a subsidy in the 2012 or
2013 budgets.
Throughout all this, Nigerians paid 120-140 naira a
litre of kerosene, far more than the supposed subsidised price of 50
naira. Yet the state oil company withheld $3.4bn to pay for a subsidy
that in effect did not exist. I have consistently held that this was a
scam that violated the constitution and siphoned off money from the
treasury.
The second major item raised in the report relates to
the transfer of oil assets belonging to the federation to the Nigerian
Petroleum Development Company, a subsidiary of the NNPC.
NPDC
has paid $100m for these assets, from which it extracted crude valued at
$6.8bn but paid tax and royalties worth $1.7bn in the period
scrutinised by the auditors. PwC was unable to establish how much of the
remaining $5.1bn should have been remitted to the government. But the
report showed that, along with the private companies NPDC partnered
with, it was extracting crude worth billions of dollars but yielding
very little revenue for the treasury. I was investigating related
transactions when I was suspended.
The third major item is a
claim of $2.8bn by NNPC for expenses not directly attributable to crude
oil operations; PwC said “clarity is required” on whether such upfront
deductions from remittances to the federation accounts are allowed, or
whether the money should have been remitted to the government. Finally,
there are duplicated expenses, “unsubstantiated” costs, computation
“errors” and tax shortfalls; a total of $1.48bn has to be refunded.
Of
the $18.5bn in revenues that the state oil company did not send to the
government, about $12.5bn appears by my calculations to have been
diverted. And this relates only to a random 19-month period, not the
five-year term of Mr Jonathan, the outgoing president.
Nigerians
did not vote for an amnesty for anyone. The lines of investigation
suggested by this audit need to be pursued. Any officials found
responsible for involvement in this apparent breach of trust must be
charged.
- Lamido Sanusi is the emir of Kano and a former governor of the Central Bank of Nigeria
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