A Review of the Nigerian Energy Industry

NNPC must prove how it spent $10.8bn — Okonjo-Iweala

ngozi-okonjo-iweala-300x33020 January 2014, Abuja – Minister of Finance, Dr. Ngozi Okonjo-Iweala, has said the Nigerian National Petroleum Corporation needs to provide evidence that the unmeritted $10.8bn has been judiciously spent.

She said the NNPC claimed to have used the unremitted funds for key operational costs.

The minister said this in Lagos on Sunday, while responding to questions about the unremitted funds to the Federation Account by the NNPC and other economic issues.

She spoke at a dinner organised in her honour by South-East and South-South Professionals.

“If the money was spent on operational costs, let us see evidence that it was spent in an authorised way. And if not, let the amount be remitted to the Federation Account,” she said.

To ensure that the issue is properly resolved, Okonjo-Iweala said the services of auditors might be required.

“I am not the auditor of the NNPC account,” she added.

There had been disagreements over the actual amount unremitted by the NNPC, but the finance minister explained that it was not unusual to have conflicts over the amount to be remitted by an agency.

She said the government, however, had structures in place to resolve that.

According to her, every month, all those involved in revenue management meet at the FAAC Committee level to review what has been paid into the Federation Account by agencies such as the Nigerian Customs Service and the Federal Inland Revenue Service. And they ask questions when figures conflict.

Okonjo-Iweala also said people were beginning to misunderstand her role as the Coordinating Minister of the Economy.

“I am the Coordinating Minister of the Economy; not the superintending minister… I cannot do the job of the NNPC,” she said.

She, however, said apart from ensuring that all Federal Executive Council members did not work at cross-purpose, her job involved ensuring that every amount that should get to the Federation Account was remitted.

Okonjo-Iweala also said the government was working to boost the non-oil revenue to compensate for revenue short falls as a result of sectoral incentives provided to encourage local production.

She added that the government had, apart from working hard to block leakages in the oil subsidy management, set up teams to block leakages in the old pension scheme and address the problem of multiple taxation.

According to her, the government will continue with its integrated personnel management scheme, which together with other leakage-blocking efforts, had saved the country hundreds of millions of naira.

She said, “Multiple taxation is a major problem and we are looking at it to see how we can get rid of minor multiple taxes and focus on the main taxes.”

The minister has come under heavy criticism in recent times with regards to some of government policies, but she said she remained undaunted.

She said while there were still many things to be done in the economy, the government was clear about its plans.

She said, “When you understand what you have to do, you are undaunted… All the attacks make me strong. I am a fighter by nature and we are on the right track.

“I am not saying that we have all the right answers, but allow us to work; I am going to keep working and I enjoy a good challenge.”

Meanwhile, the Governor, Central Bank of Nigeria, Mr. Lamido Sanusi, has said the NNPC has no right to retain $10.8bn in income, which has contributed to a drop in savings and exposed the nation to possible price shocks.

Bloomberg quoted Sanusi in an interview at the CBN headquarters, as saying, “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 susciptible to shocks in the event of a decline in the oil price.”

– The Punch

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