- Why would the NNPC not abide by TSA?
For how long will the Nigerian National Petroleum Corporation (NNPC) be allowed to operate in flagrant disobedience of the most elementary tenets of fiscal responsibility? More than 18 years after Nigeria returned to constitutional rule, the corporation continues to resist entreaties to throw its books open for public scrutiny just as its penchant for opacity and outright outlawry appears to know no bounds.
Penultimate Thursday, the Federation Account Allocation Committee (FAAC) meeting had to be called off over an alleged outstanding N1.78 trillion into the federation account. Said to be outstanding are about N1.32trillion covering the period 2010 – 2015 during the administration of former President Goodluck Jonathan; and accrued earnings of N460.649bilion for the period between January 2016 and September 2017.
The states also have issues with proceeds from NLNG Feedstock sales, Chevron Cheetah Project, Royalty Oil Sales Value lifting by TEPNGA MCA, RDP Price Review and others – totaling $172,913,617.30. Whereas the Minister of Finance, Kemi Adeosun, who inherited the challenge of reconciliation, claims to be addressing the matter, the NNPC blames the situation on the N797billion said to be the cost it incurred on product and pipeline losses.
Mercifully, the FAAC meeting eventually held on Saturday, after which the federal, state and local governments shared about N609.95bn for November, 2017. It is instructive that the meeting was the first such to hold on a Saturday. It should have held last Friday but for the inability or failure of the NNPC to produce the component statement, a very important document on revenue generated by the corporation.
We continue to wonder at the practices under which the national oil corporation – an institution that is at best a rent collector – not only determines (solely) what gets paid into the federation account but also the time to render the returns to its principals. Of course, we understand that the exigencies of the complex operations could sometimes warrant delays in book reconciliation. If the states are to be believed however, these are not straight-forward book keeping issues but issues rooted in the opaque accounting practices of the national oil corporation.
As it appears, the initial ruckus is over the N797billion NNPC claimed to have incurred as product and pipeline losses – a charge vehemently contested by the states on the grounds that the NNPC failed to show proof as a result of which they demanded a forensic audit of the losses and how these came up to the bill put up by NNPC. Obviously sensing bad faith on the part of the corporation over this as indeed other related matters, the states reportedly ordered its body of finance commissioners to boycott penultimate week’s meeting.
In the first place, the NNPC, unlike the states whose finances are in dire straits, could afford to stall for as long as it wanted. Unfortunately, if we struggle – to no avail – to locate either the financial regulation or the relevant law that allows a public entity to incur the kind of expenditures in question without prior appropriation, we are even more alarmed that the corporation could, through subterfuge, weaponise an instrument so rooted in brazen outlawry to deny the states of their dues.
To the extent that the questions raised by the states are as fundamental as they are constitutional, they require urgent answers by the corporation. Were approvals sought, apriori, to incur the expenses? If yes, were these duly captured through appropriation? What about the contracts– did they pass through due rigours of process? And were they duly signed off after completion?
No doubt, the states are right to seek answers to the questions through the forensic audit. However, the idea that the NNPC could hide under a nebulous clause in the so-called interim report by the Tripartite Committee of Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), ‘that no party would be paid until the forensic audit was completed’ is as shameful as irresponsible. We urge President Muhammadu Buhari, as the substantive minister for the petroleum ministry, to direct the corporation not only to conclude the reconciliation but initiate measures to pay what is due to the federation account without further delay.
