Unremitted $20b: Okonjo-Iweala Opts For Independent Forensic Audit

By: Olusegun Lawrence            Minister of Finance, Ngozi Okonjo-Iweala has said that only an independent forensic audit could clear the air on the alleged unremitted $20 billion oil money.

Okonjo-Iweala, who doubles as the Coordinating Minister of the Economy, made this position known on Thursday when she appeared before the Senate Committee on Finance that is investigating the alleged unremitted funds into the Federation Account.

The Governor of Central Bank, Sanusi Lamido Sanusi, had during the last hearing of the committee made fresh allegation of unremitted $20 billion by the Nigerian National Petroleum Corporation (NNPC).

Finance Minister told the Ahmed Makarfi-led committee that since it is only the CBN Governor that is insisting that money is still missing, only forensic audit could put the matter to rest.

Okonjo-Iweala, said based on the insistence of the CBN Governor, “Our judgment is that a proper examination of these documents requires technical expertise beyond the capacity of the reconciliation team, etc, and therefore we believe we should have an independent forensic audit, managed independently of these submissions”.

The minister had said, “Recall that the original issue was that $49.8 billion was unaccounted for, triggered by the CBN’s letter to Mr. President;

“As critical stakeholders in this matter, the Ministry of Finance convened a reconciliation meeting of the parties in December 2013 because we also want to see that all revenues owed are remitted to the Treasury;

“The outcome of this meeting was that the parties were able to reconcile most of the money thought to have been unaccounted for. These represented crude oil liftings on behalf of relevant Agencies, like the FIRS, DPR, NPDC, 3rd Party, etc., which had been duly paid into the accounts of government as PPT, royalty, etc. The amount that was still unaccounted for was now $10.8 billion, as indicated in the communiqué issued at the end of those meetings;

“It should be emphasised that the issue of unremitted funds by NNPC is not new, it has been an ongoing issue at every FAAC meeting chaired by Ministry of Finance, as evidenced by reports from the monthly meetings. As of December 2013, the cumulative unreconciled figure of shortfalls from NNPC payments stood at N1.792 trillion about $11 billion;

“Let us now focus on the original $10.8 billion which was the shortfall we had as at July 2013.  Another reconciliation meeting was held, at which NNPC presented data of how they utilized the balance of $10.8 billion, namely, amount withheld for subsidy ($8.766 billion); holding cost of strategic reserve ($0.4599 billion); crude oil and product losses ($0.761 billion); pipeline management cost ($0.905 billion), for a total of $10.89 billion;

“The data presented were all certified by PPPRA as being accepted. We asked to see the backup documentation to enable verification. Our judgment is that a proper examination of these documents requires technical expertise beyond the capacity of the reconciliation team, etc, and therefore we believe we should have an independent forensic audit, managed independently of these submissions;

“Now going to the issue of the new figure of $20 billion, let me remind the committee that the NPDC and 3rd party arrangements featured in the original reconciliation effort in the cascade presented by NNPC;

“However, at the reconvened meeting of this (Senate) Committee hearing last week, the CBN had re-presented these two aspects as the crux of the new $20 billion amount unaccounted for. These new figures include amounts deemed to be due to the Federation Account as proceeds from NPDC operations of oil fields previously owned by Shell Petroleum Development Company (SPDC), and unremitted amounts captured as third party financing;

“In looking at these elements, the reconciliation committee concluded that the issues are largely legal and require careful legal interpretation, which would need to be given more detailed attention by legal experts. For example, what is the legal status of NPDC and who owns the revenues earned by this entity? Is it the Federation Account or NNPC? The NNPC and CBN have both indicated they will give expert legal opinion on these issues”.

Defending the alleged missing $10.8 billion, the Group Managing Director of the NNPC, Andrew Yakubu gave an account of how the money was expended.

“Today, the Corporation is pleased to present further clarification on all outstanding issues relating to non-remittance of $10.8 billion.
“For the benefit of this committee and all Nigerians let me quickly state here that long before the allegation of 49.8billion, NNPC, FAAC, CBN and federal ministry of Finance are clearly aware of the outstanding US10.8 billion and the issues relating to its non-realization,” Yakubu said.