NNPC's Missing $49.8billion: CBN Stands By Its Allegation Against Dr. Goodluck Johnathan

The Central Bank of Nigeria (CBN) said today it
would neither confirm nor deny a widely-circulated letter sent to President Goodluck Jonathan by its governor, in which he
scandalously revealed that the Nigeria
National Petroleum Resources has between
2012 and 2013 failed to remit nearly $50
billion into the Federation Account.

In a press statement by the bank’s Director of
Corporate Communications, Ugochukwu
Okoroafor, the bank said it considered any
discussion of the alleged letter to be
inappropriate.

Despite that, the CBN, citing a “gathering
momentum in the public space,” and the fact
the matter seems to be assuming a highly-
politicized dimension, offered 10
“clarifications.”

Among them, the it stressed that in the
performance of its,  role it is natural for the
CBN to be concerned  at the low level of
accretion to reserves and the Excess Crude
Account, despite strong international oil
prices, especially as Nigeria's   performance
is compared with other oil producing
economies.

This amounts to a reiteration of the bank
governor’s reason for writing the letter to
President Jonathan in the first place, and
that the NNPC stands guilty as charged.

The CBN also took the opportunity to restate
its support of the Petroleum Industry Bill
(PIB).

“The  Central Bank   of Nigeria   recognizes
that   there is  an urgent need  to review
fiscal terms  of sharing  revenues  between
the Federal Government and oil companies
and to  improve governance and transparency
in the official oil sector,” the statement said.
“This underscores the need to  urgently pass
a Petroleum Industry Bill (PIB)  that addresses fiscal  terms and the  structure of the NNPC. We therefore support the effort of
the Federal Government to pass a new PIB.”

In our original story dated December 9, 2013,
SaharaReporters reported that in the letter,
which CBN Governor Sanusi Lamido Sanusi
hand-delivered to President Jonathan in
September, he lamented the continuing failure
of the NNPC to honor its legal obligations to
the country, including failure to remit $49.8
billion to the Federation Account between
2012 and 2013, representing 76% of the value
of crude oil liftings during that period.

He wrote: “Our analysis of the value of crude
oil export proceeds based on the
documentation received from pre-shipment
inspectors shows that between January 2012
and July 2013, NNPC lifted 594,024,107
barrels of crude valued at
$65,332,350,514.57. Out of this amount,
NNPC repatriated only $15,528,410,098.77
representing 24% of the value.  This means the
NNPC is yet to account for, and repatriate to
the Federation Account, an amount in excess
of $49.804 billion of the value of oil lifted in
the same period.”

Full text of the press statement:
CENTRAL BANK OF NIGERIA

The attention of the Central  Bank of Nigeria has been drawn to an emerging public
discourse around a letter purportedly written
by the  Governor  to   His  Excellency the
President of the Federal Republic  of Nigeria,   Dr. Goodluck Ebele
Jonathan, GCFR, expressing concerns over
non-remittance of oil revenues  by the Nigerian
National  Petroleum Corporation (NNPC).

The Central   Bank  of Nigeria   will neither
confirm nor deny the existence of  such  a
letter and considers  any discussion by  it on
the alleged letter to be inappropriate.
However, to the extent that  the matter is
gathering momentum in the public space, and
seems to be assuming a highly  politicized
dimension, the Bank wishes to issue the
following clarifications:

1. The CBN is statutorily mandated to
establish price stability, protect the  external
value of our  national currency, manage  the
external reserves  of the Federation and
ensure  the smooth functioning of  our
financial system, as well   as  adviser to
the President on economic matters.

2. The capacity of the Bank to perform its role
effectively is strengthened or undermined by
the extent to which  the  nation  is able   to
increase   foreign exchange earnings  and
savings   from these  earnings, thus boosting
the Excess Crude Savings  Account, raising
reserve levels, providing currency  stability and
moderating interest rates with  limited risks to
inflation and financial stability.

3. In the performance of this role it is
natural for the CBN to be concerned at the
low level of accretion to reserves and the
Excess Crude Account, inspite of strong
international oil prices, especially as
Nigeria's performance is compared with
other oil producing economies.

4. The  Central Bank of  Nigeria  is aware
that   this concern  is shared by   Mr.
President, the Federal ; Ministry
of Finance, Ministers, State Governors,
legislators, economists, analysts  and all
stakeholders involved in managing the
economy and discussions on how to  address
the    matter are being  held at highest levels
of Government.

5. The CBN is aware that, on the  instruction
of the Honourable Minister of Petroleum
Resources,  the audit firm, PWC has  been
directed to audit  the revenues  of the NNPC.

6. The  CBN is also aware  of a proposal to
set up  a technical team  made up of
representatives the  Federal Ministry of
Finance, the  NNPC and the  CBN to examine
the sources  of any  revenue leakages  and
propose appropriate fiscal controls.

7. The CBN welcomes these initiatives and
believes that they represent a positive
contribution to  the process of improving the
management of the economy, especially if
they  lead to  greater oversight  of
the    Finance    Ministry over oil revenues
and improvements in disclosure and
transparency in the Oil Industry.

8. The  Central Bank of Nigeria
recognizes that there is  an urgent need
to review fiscal terms  of sharing  revenues
between the Federal Government and oil
companies  and to  improve governance and
transparency in the official  oil sector. This
underscores the need to urgently pass a
Petroleum Industry Bill (PIB)  that addresses
fiscal terms  and the structure of the NNPC.
We therefore support the effort of the
Federal Government to pass a new PIB.

9.   The CBN will continue to use appropriate
channels of communication in  these
matters and  hereby assures all stakeholders
in the country, of its continued support in all
efforts aimed at  strengthening the Nigerian
economy and  reducing its vulnerability to
shocks from  the external sector.

10. The Central  Bank of Nigeria  will not
issue further statements on this matter and
urges the general  public to avoid
unnecessary politicization of  a technical
matter while  awaiting the outcome of on-
going consultation and reviews.
Ugochukwu Okoroafor,
Director, Corporate Communications