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CBN Bombshell on NNPC turns a fluke, CBN Gov. Unable to Prove N50billion Allegation – At Joint Meeting



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Information available to 247ureports.com obtained through sources near the center of power in Abuja indicate that the controversial allegation levied by the Central Bank of Nigeria [CBN] Governor, Malam Sanusi Lamido Sanusi on the handlers of the oil proceeds of the federal republic of Nigeria – of having “misplaced N50billion” – may have been made under a guise. A source states that the CBN gov may have spoke out of political concerns and/or political career rather than the concerns of the nation.

This information was made evident following a meeting held between the Central Bank of Nigeria, Nigerian National Petroleum Corporation, the Department of Petroleum Resources, the Federal Inland Revenue Service, the Office of the Accountant General of the Federation, the Budget Office of the Federation, and the Federal Ministries of Finance and Petroleum Resources. The meeting was held to help reconcile the nation’s revenue.

Minister of Petroleum Diezani Allison-Madueke
Minister of Petroleum Diezani Allison-Madueke

During the meeting, it was found that the CBN governor spoke in error when he told the Nigerian public that Nigeria’s oil revenue managers may have misplaced the sum of N50billion.

A source close to one of the participants of the joint meeting revealed to 247ureports.com that the CBN governor participated fully in the effort to reconcile the discrepancies supposedly highlighted by the allegations levied by the CBN governor. The source pointed out that the CBN seemed determined to prove his allegations – but “he was not fully informed of the data and processes involved”.

Few minutes into the exercise, the source notes – brought Malam Sanusi to the quick realization that he may have spoken without the complete facts. The source revealed that Sanusi – upon realizing his error – offered a silent apology to the affect principal officers.

The source added – “The meetings just held, reconciled $39 billion leaving a shortfall of $10.8 billion. The shortfall is being addressed in present discussions that have being ongoing for months. They have been previously addressed at FAAC and all parties are working hard to resolve the issues“. 

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Below is a summary of the findings – from the meeting

1. The Central Bank of Nigeria (CBN) recently reported that about USD49.8 billion could not be accounted for from crude oil exports by the NNPC over the period January 2012 to July 2013. The CBN raised this concern in the context of low accretion to the foreign exchange reserves despite sustained high oil prices. This note is the outcome of a reconciliation exercise among the aforementioned stakeholders, held at the Ministry of Finance, to clarify the issues raised by the CBN.

2. According to the CBN, based on data from pre-shipment inspection agents, over the period January 2012 to July 2013, a total of 594.02 million barrels of crude oil were lifted by the NNPC, amounting to about USD65.3 billion. However, the amount remitted into the Federation Account at the CBN amounted to only USD15.53 billion. This prompted the CBN to raise the issue of an observed gap in expected revenues.

3. A revenue reconciliation meeting was therefore convened among the CBN, NNPC, the Federal Ministry of Finance and other stakeholders to clarify the observed sources of discrepancy. At this meeting, the NNPC noted that the actual proceeds from crude oil exports over the period amounted to USD67.12 billion, and was thus about USD1.79 billion higher than the revenues reported by the CBN (possibly due to timing differences and NPDC liftings which were not included in the CBN report).

4. According to the NNPC’s records, the total revenues of USD67.12 billion, was comprised of revenues which directly accrued to NNPC (for the Federation Account) of USD14 billion; and additional revenues lifted by NNPC on behalf of other parties as follows: for FIRS (USD15 billion), for DPR (USD2 billion), for NPDC (USD6 billion) and for other third party financing (USD 2 billion). In addition, domestic crude lifted by the NNPC amounted to about USD28 billion. This domestic crude component was not reflected in the CBN’s foreign accounts, but rather paid directly in Naira into the Federation Account. Taking account of these various exports conducted on behalf of the non-NNPC parties, the total of USD67 billion was mostly accounted for. This substantially addresses the issues raised by the CBN.

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5. However, the Federation Account indicates that over the period January 2012 to July 2013, a shortfall of N1.716 trillion was recorded from the domestic crude oil receipts. This shortfall was acknowledged by NNPC, and explained to be the result of subsidy claims, unrecovered crude/product losses, and cost of strategic petroleum storage (which is currently not captured in the PPPRA template for refunds). This figure is also well-known to all stakeholders at the Federation Account Allocation Committee (FAAC), and is reported and updated on a monthly basis.

6. To tackle this shortfall in revenues, the Government has initiated various steps to address these challenges from both security and operational fronts.

7. As a result of the changing structure of the business arrangements – from joint ventures to production sharing contracts, alternative financing arrangements, and the impact of the fiscal regime on gas development – the government take in recent years has been declining. In this regard, a quick passage of the Petroleum Industry Bill (PIB) will help to reverse this trend.

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