Tuesday, June 15, 2010

NNPC Vs Min Of Finance: Who Will Sit In Judgment?


Until informed Nigerians wake up to demand answers from the people that are supposed to be representing or rather ruling over our collective interests as government, we will continue to have a country of absurdities. Why are Nigerians not bothered that while there are very sharp increases in international oil prices and huge increase in oil production by volume as acknowledged by the Minister of Petroleum Resources, revenue earnings from Nigeria’s oil exports have not translated into commensurate improvements in the country’s external reserve. Rather than increase, the nation’s external reserve has been on the downward slide since the later days of Late President Umaru Yar’adua.

As curious as it is interesting, the Ministry of Finance which is the traditional treasurer to the country has publicly disclosed that it does not know the exact amount of revenue being earned at any given time from crude oil sales. Before the now, all oil proceeds went directly into foreign accounts held by the Central Bank of Nigeria (CBN) and it showed promptly in the nation’s external reserves.

But somebody somewhere woke up and introduced a new order where Nigerian National Petroleum Corporation (NNPC) now curiously first receives all oil revenue earnings into its own foreign accounts completely shutting out the Central Bank of Nigeria (CBN). So as far as the CBN and the Ministry of Finance are concerned, the figures they know are simply what the NNPC tells them the nation earns. Period!

This new payment arrangement or rather aberration, obviously has been responsible for the continued picture of a depleting external reserve as the nation’s oil revenue earnings are no longer captured in CBN foreign reserve accounts.

The crucial question is: Who gave the NNPC first line control of all oil revenues- late President Yar’adua or those who signed-in for him throughout the period of his incapacitation and incarceration? This question has become very pertinent because we need to deconstruct the magnitude of fraud that must have occurred through this sinister payment arrangement.

Nigerians should demand explanation from the former Minister of Petroleum Resources, Dr Rilwanu Lukman and his counterpart in the Finance Ministry under the Yar’adua dispensation. These two key officers should not only explain the reason behind such arrangement but should account for the volume of crude oil produced and sold since the new arrangement was introduced. Also, whosoever was signing for our late President throughout the period of his ailment should equally be asked to tell Nigerians what informed that decision. The EFCC should ask questions in the appropriate quarters, if for nothing but as part of its pretence of seriousness in the fight against fraud and corruption.

In the first instance the previous arrangement where the Central Bank had the first line control of all oil revenues was introduced to check the alleged sharp practices and widespread corruption perceived to be endemic in the NNPC/DPR system. But with the current situation, the NNPC has free hands to do whatever it likes.

Moreso, the NNPC and the joint venture partners have been running the nation’s oil show with a “strange understanding” especially in the abracadabra arithmetic of calculating the joint venture cash call obligations without any input from any other government agency. This unholy relationship is believed to be the crux of the ongoing fight between the NNPC and the Ministry of Finance over who controls the National Petroleum Investment and Management Services (NAPIMS), the strategic investment subsidiary of the NNPC.

It is widely believed that the joint venture cash call transactions have not been transparent as projects attached to cash calls are not clearly categorized or rather defined as alleged by the Ministry of Finance. The Ministry is not happy with the arrangement where the NNPC/ NAPIMS without any input from any other government agency, handles everything about the financial arrangement that guides all the existing Production Sharing Contracts (PSC) in collaboration with the operating joint venture partners. It had insisted that Government needs to know the arithmetic used in arriving at the costing of projects by the NNPC/NAPIMS

The position of the Finance Ministry in this matter seems justified as over $15 billion is deployed annually as investment in the nation’s oil industry and the Federal Government provides about sixty percent of this fund as its joint venture counterpart funding. So there is enough reason for some government (Finance Ministry) officials to raise eyebrows in view of the now consistent allegation of corruption against the NNPC- whether real or perceived.

On the face of it, the Ministry of Finance made sense in its argument but the crux of the matter can never be ascertained on superficial assessment of well-packaged arguments from either sides but on the actual intention of such proposal. And in this case, the Ministry seems to be pushing a sinister agenda also which time alone will expose. Is it not laughable that anybody in the Finance Ministry can accuse the NNPC of “widespread systemic corruption?”

The question is: Is it possible for the nation’s apex oil concern to be that corrupt without significant/major input from the Ministry and/or its top officials? If I cannot be corrupt without your assistance/permission, is it possible for me to be more corrupt than yourself?

President Goodluck Jonathan should as a matter of urgency look into some of the corruption and fraud-driven policy-like directives smuggled through the back door during the period of incarceration of the late President with a view to redressing them as most if not all of such directives came straight from the late President’s kitchen.

IFEANYI IZEZE, ABUJA (iizeze@yahoo.com)

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