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Buhari to publish PwC Forensic Audit on NNPC

By on April 24, 2015

President-elect Muhammadu Buhari’s administration will publish the full audit of the Nigerian National Petroleum Corporation (NNPC) and expects the state-run oil firm to repay the government more than previously recommended, former Ekiti State Governor, Dr. Kayode Fayemi, has said.
According to a Bloomberg report, Buhari’s All Progressives Congress (APC) believes NNPC may need to refund more than the $1.48 billion stated in the highlights of a PricewaterhouseCoopers LLP (PwC) report released by the Auditor-General of the Federation in February, Fayemi, who is also the APC Presidential Campaign Director of Policy, said Tuesday in an interview at his residence in Lagos. Ohi Alegbe, NNPC’s spokesman, declined to comment.
“I have a figure that’s more than $1.5 billion that’s been talked about,” said Fayemi. “We’ve seen credible information that what PwC says is more than that. We will release the report. We’ll make it available to Nigerians as soon as we have full information on this.”
Former Central Bank of Nigeria (CBN) Governor and now Emir of Kano, Muhammad Sanusi II, was suspended by President Goodluck Jonathan last year after he alleged the NNPC hadn’t turned over about $20 billion of oil revenue to the government, which earns two-thirds of its revenue from the commodity.
Sanusi also said last month that the issue wasn’t addressed sufficiently.
The oil company said the PwC report, which Jonathan’s government hasn’t published in full, absolved it of Sanusi’s allegations. It has started to refund the $1.48 billion, Petroleum Minister Diezani Alison-Madueke told reporters on Wednesday.
The APC may also reorganise the NNPC, which regulates the petroleum sector and takes part in production through joint ventures with Royal Dutch Shell Plc., Exxon Mobil Corp., Total SA, Chevron Corp. and other companies, Fayemi said.
“NNPC will not be in the form or shape it is currently in,” Fayemi said. “Some measure of unbundling will happen.”
During the March elections, Buhari became the first opposition leader to oust a sitting president since the country’s independence from the United Kingdom in 1960. He will take power on May 29.
Buhari’s campaign focused on tackling corruption and Boko Haram’s insurgency. The Islamist group has killed more than 13,000 people, mainly in the northeast, since 2009.
Nigeria is also battling graft, ranking 136th out of 175 countries in Transparency International’s 2014 Corruption Perceptions Index, in line with Russia and Iran.
The military’s failure to defeat the militants is an “embarrassment” and it will be “re-professionalised” after a government audit on spending, Fayemi said.
Buhari told delegates at a conference of the Nigeria Labour Congress (NLC) in February that he would investigate how the military spent $32 billion over five years.
“Democratic control of the military is significantly lacking,” Fayemi said. “The leadership will change.”
Nigeria, Africa’s biggest economy and largest oil producer, has been battered by the 47 per cent fall in Brent crude prices since a one-year peak in June.
Economic growth is forecast to slow to 4.8 per cent this year, about half the average of the last 15 years, according to the International Monetary Fund (IMF).
The naira has weakened 17 per cent against the dollar in the past six months, more than any of the 24 African currencies tracked by Bloomberg.
Buhari’s government will be “clearly to the left” of Jonathan’s outgoing Peoples Democratic Party (PDP) and may boost social spending, including on free school meals and care for the elderly, Fayemi said.
The APC will be able to fund its plans by saving about N3 trillion ($15 billion) per year from plugging “leakages” and by improving non-oil tax collection, he said.
“This will be deployed to the power sector, to the social safety net,” he said.
Nigeria spends as much as $7 billion a year subsidizing fuel, an expense several economists criticize. Even though the subsidies create “artificial” pricing at gas stations, there’s no guarantee the APC government will cut them, according to Fayemi.
“In the short term, I don’t see us removing any subsidy,” he said.
While the central bank’s independence is key, the new government will probably want it to focus less on developmental agendas such as funding agriculture and SMALL BUSINESSES and more on pure monetary issues, Fayemi said.
The regulator “has undertaken a lot more responsibility than I believe it ought to,” he said. “It has become a be-all-and-end-all institution. It makes for less accountability in the system when you’re stretched that thin.”
Ibrahim Mu’azu, spokesman at the CBN, didn’t immediately respond to an e-mail requesting comment.
Buhari captured 52 per cent of total votes cast compared to 44 per cent for Jonathan, a 57-year-old Christian from the south. The APC’s supporters have high expectations and they will quickly be disappointed if the party doesn’t fulfill its promises, Fayemi said.
“This excitement that we’re seeing is going to wear off if we don’t start delivering,” he said. “In six months or one year, the language will change.”
However, Alison-Madueke, who has come under increasing attacks and false media reports, yesterday said she was being persecuted for stepping on big toes while ridding the petroleum sector of corruption.
She equally stated that she had not sought for assistance from anyone to protect her name, as reported by some online media organisations, because she has not been indicted for committing any crime.
The petroleum minister, who fielded questions from State House correspondents, said she had done her best for Nigeria and attained many firsts in the history of oil and gas in the country, especially in the area of reforms carried out by the Jonathan administration.
“I stepped on many big feet particularly the cabals that were in the industry when we came in, because I have said severally that we will open up the industry to all Nigerians and we have, but that was not to the pleasure of certain cabals.
“I have been continuously maligned because of this and we have taken millions and in fact billions of dollars out of the hands of foreign multinationals and their sub-contractors, and put them in the hands of Nigerians through the Nigerian Content Act,” she said.
On the demand by the Federation Account Allocations  Committee (FAAC), that NNPC should refund the $1.48 billion unearthed in the PwC report, the petroleum minister recalled that the forensic audit was submitted a few weeks ago.
“In its recommendations, PwC stated that $1.48 billion was owed by NPDC (Nigerian Petroleum Development Company) for a block that had hitherto been assigned from the NNPC to NPDC, which is its subsidiary, and they felt that the right process was that NPDC should refund that money to the Federation Account,” adding that NPDC had started making refunds, and was in discussions with NNPC and DPR on the issue.
On the report that her meeting with former military Head of State, General Abdulsalami Abubakar, was held to shield her from prosectuion, she said Abubakar had already addressed the issue and called it unnecessary mischief.
She tasked the media to do its investigations properly and deal with the facts.
“I had the privilege of meeting with many senior statesmen during that course of my job in the Federal Executive Council and I was surprised that he should be singled out in any such form.
“The short answer is no, I have not sought such assistance because I am not aware that I have been indicted for any crime that I will need a soft landing.
“Over the last four years, I have been severally and unfortunately accused and labelled in so many malicious and vindictive ways. I have explained these things and pushed back robustly on these accusations and I have even gone to court on many of them, yet they keep being regurgitated.
“And I think it is unfortunate, particularly when we are in a transition period and looking forward to an incoming government, which is coming to take over where we have ended. For everything that has a beginning there is an end and that is not a surprise.
“What is surprising is the sort of malevolence bordering on personal malicious libel to my person during this period.  Hundreds of thousands of Nigerians have come into the oil and gas industry because of our reforms.
“Quite frankly, I think as unprecedented as this was, it did not please everyone and that cannot be helped. But let us remember the unprecedented reforms that have happened in the oil industry during our time, such as major gas reforms, the Petroleum Industry Bill, which has been completely revised, reformed and put into the hands of members of the National Assembly where it has languished for almost three years.
“In that bill are all the reforms needed to restructure and unbundle NNPC, make it a national oil company, an equity share company through transparency, make it accountable and responsible and reduce corruption in the industry.
“We did all these and we put in place measures to reduce corruption, so for me to be tagged with corruption – $10 million jet purchases – who buys a jet for $10 million dollars for goodness sake?
“And $20 billion missing money for which PwC had done a report and the $1.48 billion, which is not missing, as it is actually money transferred by the NNPC to NPDC, which has actually started making payments under my directive.
“I have said during our time that there were gaps in the NNPC, and I said that openly. But I can also say that there was no time in Nigeria’s history in the oil and gas sector that NNNPC was as open and subjected to as much scrutiny as it was under this administration.
“It has been positioned to go forward in the industry; it is true that the revenue profile is not sustainable, but we have done our best and the Nigerian oil and gas sector is today in a better shape than it has ever been in terms of achievements that we have recorded,” she said.
Alison-Madueke also addressed speculative reports that she had been seeking asylum in countries overseas, stating: “Let me state it clearly for the record that Nigeria is my country and I am not going anywhere. I love my country and I do think that I have done the best for my country, and I would also like to point out that these malicious, malevolent, vindictive libelous stories coming out of places like Osun Defender and other faceless online media and other entities need to stop.
“We have done enough for this industry, we cannot please everybody. Yes, we have stepped on toes but we did that in the best interest of Nigeria and we have opened up the oil and gas industry to all Nigerians, thousands of Nigerians have benefitted from our reforms in the system.”
On the fuel shortages experienced in some sections of the country, she said they were “unfortunate”, stressing that the supply and distribution of petrol had been one of the high points of the Jonathan administration when it came on board.
“We have kept queues to the nearest minimum. We have moved away from the challenges of the past and ensured through our various flexible product arrangements that we kept Nigeria wet with fuel supply.
“Unfortunately, we are in transition and whenever certain things are happening, intruders will hijack the process and certain amount of hoarding takes place for various reasons. This is what we are experiencing, but there is no reason for this because our reserves are enough to keep the country wet with products throughout this period.
“I will plead with marketers to please make the fuel available. Petrol is available, so make it available to Nigerians. We have worked so hard to build the system and we don’t want it distracted in these latter days,” she said.
Meanwhile, local and international oil traders have stepped up plans to petition the incoming government over concerns about the $1.5 billion owed them by NNPC for the importation of petroleum products into the country which they said may be written off as bad debts or not captured in the handover notes to the new administration.
A senior executive in one of the affected companies told THISDAY on the condition of anonymity that sending a strong delegation or a petition to the incoming president was the best option as “there is palpable fear for us and others in the same situation that the monies owed by NNPC may be declared bad debts or not adequately accounted for in the handover notes that will be presented to the new administration”.
He said the traders were hopeful that a petition to the new government would help address the issue, as the non-payment of the debts owed them by NNPC has affected their operations and exposed the traders to growing pressure from their bankers.
THISDAY gathered that NNPC owes trading companies over $1.5 billion dating back to 2010, further raising concerns over its solvency and its ability to meet its obligations.
However, a top official of NNPC, who asked for anonymity, said the corporation was doing everything possible to fulfill its obligations to suppliers, in accordance with laid down procedures and terms of the agreements reached with the traders.
“NNPC is a going concern with fiduciary responsibilities to the government and people of the Federal Republic of Nigeria. The fact that a change of administration is in the offing does not obliterate our financial and contractual agreements with all our suppliers and partners at different levels of engagements,” he said.

 

[ThisDay]

One Comment

  1. Proud Yoruba

    April 25, 2015 at 5:48 am

    Thank God that we have sane people coming to the fore, who are starting to tell us what we have always believed, but kept being told by the axis of evil that it was our imagination running wild!

    They tried to destroy Sanusi because he blew the whistle on them and they held on to this audit report and kept lying to us about the amount of the discrepancy. Is hell not too high for these evil animals?

    We look forward to the report. Keep up the good work Mr. Fayemi, thank you.