— As $3bn pre-export loan, $722.6m LNG dividends, others remain unresolved
By Henry Umoru
ABUJA — The Federal Ministry of Finance and the Nigerian National Petroleum Company Limited, NNPCL, on Thursday traded blame over unresolved queries raised in the 2021–2023 Oil and Gas Sector Audit Report by the Nigeria Extractive Industries Transparency Initiative, NEITI.
The development followed the appearance of the Permanent Secretary of the Ministry of Finance, Mr Raymond Omachi, before the Senate Committee on Public Accounts, chaired by Senator Ibrahim Dankwambo (PDP, Gombe North), to respond to financial queries contained in the NEITI report.
Omachi told the committee that the ministry was unable to provide some of the records required to address the queries because agencies involved in the transactions, particularly the NNPCL, had not made the necessary financial documents available.
One of the issues raised by NEITI relates to a $3 billion pre-export financing loan obtained in 2012 to settle subsidy payments.
According to the audit report, the recovery of the loan from monthly Federation revenue proceeds under the Pre-Export Financing and Project Eagle agreements remained unclear.
Another query concerns $722.6 million paid by the Nigeria LNG Limited, NLNG, to the then Nigerian National Petroleum Corporation, NNPC, in 2021 as dividends and interest earned on behalf of the Federation.
NEITI said the money was neither remitted to the Federation nor properly accounted for.
The committee also considered the audit finding that none of Nigeria’s refineries was operational in 2021 despite about N200 billion reportedly spent on them.
Another unresolved issue was the $221.283 million in overhead costs incurred by the National Petroleum Investment Management Services, NAPIMS, in 2021.
Responding to the queries, Omachi said the Ministry of Finance was not directly involved in all the transactions under review, making it dependent on the relevant agencies for supporting documents.
He said: “We don’t have direct involvement in all the issues raised and required provision of financial records from the affected agencies, particularly NNPCL, NUPRC, etc., is not there.”
The Permanent Secretary disclosed that the ministry had engaged external auditors, Arthur Andersen LLP, to conduct a forensic audit of the transactions and reconcile the records.
However, Dankwambo questioned the ministry on when the forensic audit report would be ready, noting that the exercise had already been extended twice, from six months to one year.
The committee chairman also insisted that the NNPCL and the Nigerian Upstream Petroleum Regulatory Commission, NUPRC, should appear alongside the Ministry of Finance at a subsequent sitting to provide explanations on the outstanding issues.
Dankwambo said the ministry had the authority to ensure that the affected agencies appeared before the committee.
“I know you have enormous powers that you can use to compel these agencies to appear before us. We are having challenges bringing them to the table so that we can resolve these issues,” he said.
He added: “We in the Federal Ministry of Finance are ready to come and sit with them here, so that you can hear directly from them and obtain the necessary explanations and clarifications.”
The committee chairman directed the Permanent Secretary to review the ministry’s internal report and arrange a joint meeting involving the Ministry of Finance, NUPRC, NNPCL and any other relevant agency.
Dankwambo said the issues required urgent resolution because they were being monitored beyond Nigeria.
“I will like you to review the internal report and arrange a meeting involving the Ministry of Finance, the NUPRC, NNPC and any other agency whose participation is necessary to resolve the issues we have raised,” he said.
“As you are aware, these issues are being followed by the international community. They are not matters confined to Nigeria; they are in the public domain and are being monitored by people across the world.
“Therefore, if there are records or issues that need to be clarified and properly put in order, we should do so in the interest of our country. All of us have no other country except Nigeria.”
The committee is expected to continue its review of the audit queries after the relevant agencies provide the requested records and explanations.
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