CIVIL SOCIETY STATEMENT ON SENATE COMMITTEE PROBE ON NON-REMITTANCE OF OIL REVENUE TO THE FEDERATION


11th February 2014

The SAY NO CAMPAIGN–NIGERIA is a platform of non-governmental organizations, media, labour, organized private sector, faith-based organizations and community groups committed to fighting corruption, impunity, poverty, violence and other governance challenges in Nigeria. The central focus of the Campaign is built around the twin issues of corruption and impunity, especially as manifest in the Presidential pardon granted to corrupt public officers in the country. The Campaign uses different national and sub-national strategies such as advocacy, press conferences, street protests to mobilize Nigerians from all sections of the country and sectors of the economy to push for necessary administrative, legal, policy and legislative changes required to reverse ongoing trend of democratic rollback as well as promote good governance and people-centred development.

The CIVIL SOCIETY STATEMENT ON SENATE COMMITTEE PROBE ON NON-REMITTANCE OF OIL REVENUE TO THE FEDERATION ACCOUNT and its collaborating civil society partners have followed with keen interest the ongoing probe of non-remittance of oil revenue to the Federation Account by the Ahmed Makarfi-led Senate Committee on Finance. This is on the heels of revelations made through a letter communicated by the Governor of Central Bank of Nigeria (CBN) to the President on the same issue. At the heart of the probe and letter is the Nigerian National Petroleum Corporation (NNPC) that is allegedly responsible for the non-remittance initially put at $49.8 billion, but had been narrowed down to different figures ranging from $10.8billion to $20 billion.

The Ministry of Finance that is overseeing the inter-agency reconciliation process is of the view that $10.8 billion is the sum yet to be reconciled. The initial CBN’s claim of unreconciled $12billion based on a difference of $1.22 allegedly expended by the NNPC on fuel subsidy in the First Quarter of 2012, in violation of a directive to it to stop subsidy deductions effective end of December 2011 has since been raised to $20 billion. The Bank claimed the additional $8billion comes from $6bn worth of crude oil NNPC shipped for the Nigeria Petroleum Development Company (NPDC), an upstream subsidiary of the NNPC, and another $2bn from “third-party” financing.

The NNPC on its part claimed there was nothing in its coffer to remit to the Federation Accounts, arguing that the $10.8 billion that the Ministry of Finance said was yet to be reconciled was spent on kerosene subsidy and pipeline repairs, even though it is yet to show evidence of such use. While the Nigerian public has berated the NNPC for its unilateral action of spending $10.8 billion without due appropriation by the National Assembly (i.e. assuming it claim is true), the Corporation has argued that its action is within its mandate.

Considering the enormity of the issues at stake, the quantum of revenue involved and its implications for transparent and accountable use of the country’s resources, The Say No Campaign–Nigeria and its allied in the civil society struggle for a better country are deeply concerned about the uncertainties that this has created and the seemingly failure of any of the institutions named in the issue to responsibly address the concerns raised. It is to this extent that we are strongly supportive of all the mechanisms and processes that can be employed to ensure that the truth regarding these remittances is brought to fore. This is all the more necessary in the light of recurring leakages that have been identified in the series of reportsof government commissioned committees, panels and task forces on oil and gas revenue management in Nigeria. Prominent among these reports totaling almost a dozen and spanning one and half decades are:

  1. Four NEITI oil and gas audit reports (1999-2004, 2005, 2006-2008 and 2009-2011)

  2. KMPG  report on process and forensic review of the NNPC

  3. House of Representative Ad-Hoc Committee Report on Fuel Subsidy regime

  4. Aig-Imoukhuede-led committees’ reports on fuel subsidy claims and payments (2)

  5. Kalu Idika Kalu-led committee report on the refineries

  6. Dotun Sulaiman-led committee report on Governance and Global Best Practices in the NNPC

  7. Nuhu Ribadu-led Petroleum Revenue Task Force report, and

  8. (Nigeria) Natural Resource Charter benchmarking report.

The findings of all these reports have not only been validated by the New York-headquartered Revenue Watch Institute’s2013 Resource Governance Index that measured the quality of governance in oil, gas and mining sectors of 58 countries around the globe and scored Nigeria low, it has also pointed to a consistent failure of the country to dispense with opacity and institutionalise transparency and accountability in the management of its oil and gas resources.

To the above extent, Say No Campaign–Nigeriaand its allied in the civil society struggle for transparency and accountability and good governance in Nigeria pray the Senate Committee on Finance currently sitting on this matter to:

Thoroughly investigate the issues before it and establish the true state of affairs about the allegation of non-remittance of oil revenue by the NNPC

Make practical recommendations – including the institution of interfaced and automated system among revenue collection agencies of government – on how best to deal with general challenges of non-remittance by agencies of government, the NNPC inclusive, to the Federation Account.

Ensure a follow-up of the Senate and the entire National Assembly of the implementation of recommendations of the Committee, and

Galvanise appropriate support for the speedy passage of the Petroleum Industry Bill (PIB) towards achieving sustainable reforms in the oil and gas sector.

In conclusion, theSay No Campaign–Nigeria and its undersigned partners wish to extend this conversation beyond the on-going probe by the Senate Committee on Finance by placing demand on President Goodluck Jonathan to act in a manner that demonstrates genuine anger for the open stealing of oil and gas money in Nigeria as shown by the myriad of reports on this critical sector of the economy.

#NigeriaPetroleumDevelopmentCompanyNPDC #fuelsubsidy #NEITI #2013ResourceGovernanceIndex #CentralBankofNigeriaCBN #NNPC

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