A Review of the Nigerian Energy Industry

My suspension can’t sweep truth on missing NNPC money away – Sanusi

Sanusi Lamido Sanusi, Emir of Kano.
Sanusi Lamido Sanusi, Emir of Kano.

16 May 2015, Lagos — Former Central Bank of Nigeria, CBN, Governor and Emir of Kano, Muhammadu Sanusi II, has said that, although President Goodluck Jonathan suspended him over his revelations on the $20 billion allegedly missing from the Nigerian National Petroleum Corporation, NNPC’s vault, the truth about the matter cannot be wished away.

Sanusi, who spoke to Financial Times through a statement on Wednesday May 13, 2015, said: “As I said then, you can suspend a man, but you cannot suspend the truth”, adding that “The publication last month of a PwC audit into the ‘missing billions’ brings us a step closer to it.”

Sanusi, who reviewed the events leading to his suspension as the CBN boss by President Goodluck Jonathan over a year ago, stressed that contrary to claims by the Petroleum Minister of Petroleum, Diezani Alison-Madueke, the PwC audit report did not exonerate the NNPC.

He said that it rather established 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 $18.5 billion, adding that its detail about the NNPC’s account and how it used the money, raised serious questions about the legality of the agency’s conduct.

Sanusi recalled: “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?”

Giving details, Sanusi said that the auditors stated that a significant part of the unremitted funds was 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.

He wandered whether the stoppage appeared in the official gazette, leading some to question whether it ever had legal force.

He stressed: “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 $3.4billion 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.”

He added that the second major item raised in the report related to the transfer of oil assets belonging to the federation to the Nigerian Petroleum Development Company (NPDC), a subsidiary of the NNPC.

NPDC, he added, has paid $100 million for these assets, from which it extracted crude valued at $6.8 billion, but paid tax and royalties worth $1.7 billion in the period scrutinised by the auditors.

PwC, he recalled, was unable to establish how much of the remaining $5.1 billion should have been remitted to the government, even as 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.

Sanusi stressed that he was investigating related transactions when Jonathan suspended him from office.

He said that the third major item he raised was a claim of $2.8 billion by NNPC for expenses not directly attributable to crude oil operations, of which the 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.

The ex-CBN governor added that there were also the issues of duplicated expenses, “unsubstantiated” costs, computation “errors” and tax shortfalls; a total of $1.48billion had 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.” He explained.

Sanusi stressed that Nigerians did not vote for an amnesty for anyone, adding that the lines of investigation suggested by this audit needed to be pursued.

He maintained that any official “found responsible for involvement in this apparent breach of trust must be charged.”

*Ejikeme Omenazu – Daily Independent

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