The face-off between state finance commissioners and the Nigerian National Petroleum Corporation (NNPC) over remittances into the Federation Account, which has resulted in the delayed payment of workers’ salaries and disruption of government operations, is not just a national shame but also a loud testimony to the incapacity or refusal of Nigerians as a people to run a transparent system. On three different occasions, the Federation Account Allocation Committee (FAAC) meeting for the month of May ended in a deadlock due to disagreements over remittances by the NNPC and the expectations of the finance commissioners. The commissioners had rejected the N147 billion remitted by the NNPC on the ground that the corporation was trying to shortchange the states. But the NNPC, through its spokesperson, Mr. Ndu Ughamadu, said that it had an agreement with the state governors to remit N112 billion monthly, adding that the N147 billion remitted was N35 billion above the agreed sum.
Explaining the commissioners’ grouses about the remittances by the NNPC, Mr Mahmoud Yunusa, chairman of the Finance Commissioners Forum, the umbrella body of the 36 state commissioners, narrowed them down to four. First is the NNPC’s penchant for flouting the laws of the land over remittances. According to him, the law requires the NNPC to remit all funds accrued from the sales of crude oil into the Federation Account, a provision which he claimed it breached regularly. The second is the non-payment of royalties to the Department of Petroleum Resources (DPR) and Petroleum Profit Tax (PPT) to the Federal Inland Revenue Service (FIRS) in accordance with the law of the country. According to Yunusa, rather than paying the money to the agencies and allowing them to remit same into the Federation Account, “NNPC just brought the money in a lump sum, thinking it can bamboozle us without doing the breakdown.”
The third is the NNPC’s arbitrary deduction of money for expenses without carrying along the other government agencies that are statutorily empowered to handle such expenses. And finally is the issue of a flat remittance by the corporation to the Federation Account irrespective of the prices of crude oil at the world market. Yunusa explained: “Even if they had agreed with the governors to remit N112 billion when oil was sold at $50 per barrel, what stops them from paying more now that the oil price is at $80 per barrel?”
At the root of the disagreement is the opaqueness that rules in the country’s most important revenue-generating agency. Why is it so difficult for the country to know how much the NNPC makes in a month? Why can’t Nigerians, at the press of a button, find out how many barrels of crude oil were lifted by the corporation and how much was generated? If there is no transparent system in place at the NNPC, how can the country hold it to account for all revenues accruing to the Federation Account in line with Section 162 (1) of the constitution without defaulting? Then, who is responsible for calling the NNPC to order? Does the corporation report to anyone or is it a law unto itself? If the law says that the NNPC should pay royalty to the DPR, why should it get away with flagrant disregard of this constitutional requirement without any consequence? If the constitution requires the corporation to remit PPT to the FIRS, why should it fail to do that without anybody calling it to order? Are the NNPC and its managers bigger than the country and its laws?
The truth is that the office of the president is too busy to be saddled with overseeing a corporation of this magnitude and importance. Unfortunately, the office of the Minister of State for Petroleum Resources has been reduced to that of a lame duck that cannot really exercise any control over the corporation. Therein lies the dilemma. Until this is resolved and a system that will ask questions and demand answers instituted to oversee the NNPC, the corporation will keep riding roughshod over the country and nothing will get done.