Nigerian govt begins probe of NNPC over missing N8 trillion oil money, says CBN

The Central Bank of Nigeria also called for the passage of the PIB.

The Central Bank of Nigeria, CBN, on Thursday confirmed that due to leakages in revenue accrual to the Federal Government, as by indicated its governor, Sanusi Lamido the Nigerian government has commissioned two different probes into the finances of the Nigerian National Petroleum Corporation, NNPC.

Although the bank was evasive on the letter written by Mr. Sanusi to President Jonathan, it said it was aware the federal government was auditing the NNPC to prevent such leakages in future.

"The CBN is aware that, on the instruction of the Honourable Minister of Petroleum Resources, the audit firm, PWC, has been directed to audit the revenues of the NNPC," the bank's Director, Corporate Communications, Ugochukwu Okoroafor, said in a statement.

"The CBN is also aware of a proposal to set up a technical team made up of representatives the Federal Ministry of Finance, the NNPC and the CBN to examine the sources of any revenue leakages and propose appropriate fiscal controls."

The Central Bank said it welcomes these initiatives and believes that they represent a "positive contribution to the process of improving the management of the economy, especially if they lead to greater oversight of the Finance Ministry over oil revenues and improvements in disclosure and transparency in the Oil Industry."

The Central Bank's statement comes amidst demands for a probe of the NNPC after the CBN governor, Lamido Sanusi, wrote to President Goodluck Jonathan complaining of the non-remittance of $49.8 billion (N8 trillion) to the federation account by the Nigerian oil firm.

Tacitly explaining why its governor wrote to the President to complain about the missing N8 trillion, the bank said it is "statutorily mandated to establish price stability, protect the external value of our national currency, manage the external reserves of the Federation and ensure the smooth functioning of our financial system, as well as adviser to the President on economic matters."

"In the performance of this role it is natural for the CBN to be concerned at the low level of accretion to reserves and the Excess Crude Account, inspite of strong international oil prices, especially as Nigeria's performance is compared with other oil producing economies," Mr. Okoroafor said.

The Central Bank governor had in a memo to President Goodluck Jonathan alleged that the NNPC systematically diverted more than 76 per cent of revenues realised from crude oil sales between January 2012 and July 2013, claiming that only 24 per cent of the proceeds within the period was paid into the federation account.

The report stirred public anger across the country, with many Nigerians, including former President Olusegun Obasanjo, demanding immediate probe of the allegations.

The Nigerian Senate has also ordered a probe of the allegations and the NNPC; and asked its committee on finance to submit a report within one week from Wednesday.

In its reaction to Mr. Sanusi's letter, the NNPC, which has always denied any wrongdoing despite being indicted by several probes and reports, said the Central Bank governor's statement was "borne out of misunderstanding of the workings of the oil and gas industry and the modality for remitting crude oil sales revenue into the Federation Account."

The Central Bank, however, said it supported the review of the operations of the NNPC, Nigeria's largest revenue earner which operates in utmost secrecy.

"The Central Bank of Nigeria recognizes that there is an urgent need to review fiscal terms of sharing revenues between the Federal Government and oil companies and to improve governance and transparency in the official oil sector," the CBN said.

"This underscores the need to urgently pass a Petroleum Industry Bill (PIB) that addresses fiscal terms and the structure of the NNPC. We therefore support the effort of the Federal Government to pass a new PIB.

Mr. Okoroafor said "the CBN will continue to use appropriate channels of communication in these matters and hereby assures all stakeholders in the country of its continued support in all efforts aimed at strengthening the Nigerian economy and reducing its vulnerability to shocks from the external sector.

"The Central Bank of Nigeria will not issue further statements on this matter and urges the general public to avoid unnecessary politicization of a technical matter while awaiting the outcome of on- going consultation and reviews."