18 January 2014, Abuja – The Governor of the Central Bank of Nigeria (CBN), Sanusi Lamido Sanusi Friday insisted that the Nigerian National Petroleum Corporation (NNPC) had no right retaining $10.8 billion oil revenue, saying it contributed to the drop in savings “that left the nation exposed to possible price shocks.”
In a related development, former Vice President of the World Bank, Oby Ezekwesili, yesterday said she was among Nigerians dissatisfied with the explanations offered by the NNPC for the $10.8 billion and took to her tweeter handle on Wednesday to challenge the Minister of Finance, Ngozi Okonjo-Iweala to sign off on NNPC’s explanation.
Sanusi who spoke in an interview with Bloomberg in Abuja said: “Given where the oil price is, we should have more in terms of reserves and savings, and because we don’t have that we are susceptible to shocks in the event of a decline in the oil price.”
The central bank governor had written a letter to President Goodluck Jonathan alleging the NNPC withheld $49.8 billion in revenue. This had sparked a public outcry.
Thereafter, a reconciliatory meeting that involved the Minister of Finance, Dr. Ngozi Okonjo-Iweala, Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, the CBN Governor amongst others, had shown that unaccounted oil receipts stood at $10.8 billion.
But Sanusi maintained: “No one has the right to retain money that should have gone to the federation account; so the fact that you’ve admitted retaining or withholding $10 billion is itself bad enough. This money was supposed to come in and if it came in, it would be part of our reserves and part of our excess crude savings.”
Nigeria’s forex reserves stood at $43.257 billion as at January 16th. THISDAY had reported that the external reserves derived mainly from the proceeds of crude oil production and sales, had depreciated by $1.778 billion in the fourth quarter of 2013. The development was largely blamed on the dwindling federal government revenue. Also, the Excess Crude Account (ECA) had dropped to only $3.18 billion.
Nevertheless, NNPC’s Group Executive Director of Finance and Accounts, Bernard Otti had explained that the $10.8 billion was spent on pipeline repairs, fuel subsidies and strategic reserve.
“This whole process for me is one in which we need to force greater transparency over oil revenues. The NNPC has now given explanations and they’re going to be called to show evidence,” Sanusi declared.
The lack of accounting in oil revenues has increased pressure on President Goodluck Jonathan.
THISDAY had reported that Jonathan told Sanusi to resign because he allegedly leaked his letter about the NNPC unremitted revenue to Obasanjo.
But Sanusi had said his letter to the president was never meant to be made public.
“What was in fact an invitation to investigate somehow became read as the end of an investigation, the conclusion from an investigation and that wasn’t it. This was an initial report given. That, for me, raises sufficient concern to ask the president to have an investigation so we can know exactly where the money is,” he explained.
Furthermore, he noted: “Lower savings are not explained by a huge increase in government spending, because there wasn’t between 2013 and 2012. So, if spending didn’t increase much and if the oil price didn’t crash much and exports didn’t crash much, there’s a leakage. A decline in oil production doesn’t explain the draw down in savings either because the crude price has exceeded the government’s budgeted price.
The spot price of Nigeria’s benchmark Qua Iboe crude has exceeded $100 a barrel for most of 2013, above the $79 budgeted price that year.
He expressed optimism that the finance minister would be able to keep spending under control in the run up to the election.
“I have had a number of discussions with the finance minister and I get a sense she is very, very committed to keeping a tight leash on spending especially as we come towards elections,” he said.
Sanusi however declined to comment on who he thought would be his successor.
Ezekwesili, in her tweets urged Nigerians to “stand up and demand accountability over the matter.”
She urged Okonjo-Iweala to personally shoulder the responsibility of accounting to Nigerians about the ‘missing money” pointing out that “a good place to start would be if she could sign off on NNPC’s breakdown of the “missing $10 billion.”
She added: “It would help raise confidence in the administration if you took up the accounting for the missing $$10 Billion.” Statutorily, the NNPC must render accounts to her as our finance minister. If she signs off, we ought to assume all is well. Until NNPC realises that citizens will not believe their accounting without Iweala signing off the appropriateness and accuracy of those operational expenditure, they will repeat bad behaviour again.
“If as a Citizen, you are as vexed as I am at the way the issue of “missing $10Billion” has been handled tweet me. Does NNPC know that some African countries sweat to raise $5 million to stay afloat? And here, $10 billion is waved off?”
– This Day