$49.8bn not missing; records reconciled, says Okonjo-Iweala

The Minister of Finance and Coordinating Minister for the Economy, Dr. Ngozi Okonjo-Iweala, yesterday, declared that the missing $49.8 bilion has been accounted for.

The declaration followed evidence provided by the Nigerian National Petroleum Corporation, NNPC, which indicated that the alarm raised by the Central Bank of Nigeria, CBN, over the “missing” $49.8 bilion may have been a ruse.
The development followed the conclusion of a two-day crucial Revenue Reconciliation Meeting, during which the relevant ministries, departments and agencies, took a thorough assessment of their records.

The closed-door meeting, which held at the instance of the Presidency, comprised representatives of CBN, NNPC, Department of Petroleum Resources, DPR, the Federal Inland Revenue Service, FIRS, the Office of the Accountant General of the Federation, the Budget Office of the Federation, and the ministries of Finance and Petroleum Resources.
CBN Governor, Mallam Lamido Sanusi, had in a letter to President Goodluck Jonathan, declared that about $49.8 billion could not be accounted for from crude oil exports by NNPC from January 2012 to July 2013.

However, at a joint press conference in Abuja, Okonjo-Iweala said the preliminary findings of the joint reconciliation exercise reveals that the said missing proceeds were not mis-sing, but intact and in the system.
In attendance at the briefing were the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke; the Group Managing Director, NNPC, Engr. Andrew Yakubu; and Sanusi.

‘Everything’s reconciled’
Okonjo-iweala said: “There are perhaps some misconceptions or misunderstandings that led to this number, and we have been able to come to the conclusion that we can account for this amount.”
She said the meeting arrived at this conclusion after a closer and extensive scrutiny of the books by all the parties involved.

She added: “I just want to say that this reconciliation is still an ongoing matter. But we thought at this point, after working last night, we could share with you some of our thoughts and clarifications on this issue.
“And that is why we are here to resolve this and get to the bottom of this.
“So the bulk of the sum of $49 billion has been accounted for and that is what the reconciliation exercise is about. So it is very clear that it is not missing.’’

NNPC’s clarification
Responding on the same issue earlier at a hearing with the Senate Committee on Finance, NNPC’s Chief Executive, Yakubu, had clarified how CBN arrived at the amount quoted.

Yakubu said: “Funds attributable to NNPC meant for the Federation Account have been remitted consistent with existing petroleum arrangements in the industry.
“The Corporation has obligation to remit funds from direct equity export proceeds as well as value of domestic crude allocation into the Federation Account.”

Statistics
Yakubu gave further breakdown: equity export totalling $14.14 billion remitted; realisable value for the domestic allocation of $28.21 billion or N4.37 trillion, the sum of N2.26 trillion remitted; about N2.11 trillion subsumed in unrealised inflows attributable to N1.31 trillion subsidy claims, N128.05 billion crude and product theft.

About N48.42 billion strategic reserves holding cost; about N18.41 billion pipeline security and vandalised pipelines repair cost; about N12.59 billion alternative crude supply cost and N9.65 billion for other costs (fees, levies, charges).
Yakubu also listed other “outstanding legacy claims of N1.1 trillion due to NNPC, predating the period under review of (January 2012 to July 2013) being reviewed and reconciled with all stakeholders including PPPRA, FAAC, FOF.
“The net effect of consolidating NNPC’s claims against the cost of domestic crude allocation before and during the period under review is now N500 billion in favour of NNPC.”

He further listed other streams captured as remittances to the Federation from the NNPC to include: tax oil due to FIRS, $15 billion lifted and proceeds remitted directly into FIRS PPT account with CBN;
Royalty oil due to DPR, $2 billion lifted and proceeds remitted directly into DPR royalty account with CBN; NPDC production due to NPDC, $6 billion lifted and proceeds remitted into NPDC account being the sole risk operator of its licences;
Third party financing and trial marketing volumes, $2 billion lifted and proceeds remitted into Project Escrow account from where the share of the Federation is transferred into the consolidated crude oil revenue account with the CBN.
He said these are consistently reported to FAAC.
Pan Ocean, $0.095 billion lifted by NNPC on behalf of the JV and NNPC equity of 60 per cent is remitted into the Federation account with CBN.

CBN’s defence
In his defence, Sanusi blamed the controversy generated over the “missing” money on the leakage of the letter to Mr. President, which according to him, was not meant for the public.
He said: “It is the first time I am speaking about this matter in the public. I think it is important to give a little context.
“First of all, it is important to remember that the CBN never issued a public statement on this matter. The CBN wrote a letter to the President, which unfortunately found its way to the press and was at best, an invitation to begin investigation.
“It was not an end or a conclusion of an audit or investigation. Conclusions drawn before investigation were premature.”

He explained that the purpose of the letter was to address perceived gaps “between what we had in our records as the value of crude shipped by NNPC and the amount repatriated as equity to the federation account.
“What we had in our records was $65 billion shipped by NNPC and about $15 billion returned as equity to the Federation Account,” he added.

Sanusi said the reconciliation meetings have provided a clearer picture of the transactions to the apex bank.
Earlier, before the Senate Committee, Sanusi noted that the ongoing joint reconciliation exercise will help resolve and explain the outstanding issues.