NEITI’s audit report

This revelation was made by NEITI at an oil and gas conference to articulate the agenda for the administration in support of the proposed oil and gas industry reforms. NEITI disclosed that the amount represents clear cases of under-payment, under assessment of taxes, royalties, rents, etc. The scams were exposed by NEITI’s several independent audit […]

This revelation was made by NEITI at an oil and gas conference to articulate the agenda for the administration in support of the proposed oil and gas industry reforms. NEITI disclosed that the amount represents clear cases of under-payment, under assessment of taxes, royalties, rents, etc. The scams were exposed by NEITI’s several independent audit reports which though in the past did not receive adequate attention.
The Executive Secretary of NEITI, Mrs. Zainab Ahmed described the transfer of eight oil wells sold by the Nigerian National Petroleum Corporation (NNPC) to the Nigerian Petroleum Development Company (NPDC) in 2010 and 2011 as lacking in transparency; calling for a full investigation in to the transaction to ascertain the actual cost of the oil blocks and the revenue lost by the federation in the whole transaction. Mrs. Ahmed affirmed NEITI’s readiness to provide every information and data that will assist government to recover the funds.
Giving a breakdown of the amount which the country lost to oil and gas operators, Mrs. Zainab Ahmed noted that $11.6billion (about N2.32 trillion) represents outstanding total dividends arising from loans and interest repayments from Federal Government investments in NLNG. She further used the forum to express NEITI’s position on oil subsidy; arguing that “the oil subsidy regime is a fraud that should not be allowed to stand any longer”. She also clarified that the amount annually spent on oil subsidy is enough to repair the broken down refineries or even build new ones. Mrs. Ahmed advised the new administration of President Buhari to provide the necessary political will required for implementing other recommendations contained in NEITI’s independent report, which according to her, are comprehensive and insightful to guide government in reforming the oil sector.
Following NEITI’s revelations, the Group General Manager, Group Public Affairs Division, NNPC, Mr Ohi Alegbe, issued a statement to explain the circumstances surrounding the reported non-remittance of the $11.6 billion NLNG dividends. Alegbe said contrary to the impression created by NEITI that nothing was being done to get the money remitted; the matter had since been referred to the Inter-Ministerial Task Team (IMTT) for reconciliation and resolution. However, the fact that the IMTT meeting scheduled to resolve the matter failed to hold is a reason to doubt Alegbe’s submission and instead believe in NEITI’s findings. 
NEITI under Mrs. Zainab Ahmed deserves commendation for doing one of its statutory jobs of whistle blowing when necessary. NEITI’s pronouncement that its audit reports were not taken serious before now is an indictment of the just recent past administration whose acclaimed fight against corruption never went beyond lip-service, which explains why un-remitted funds accumulated to what it is now. Besides, the revelations by NEITI could be a tip of the iceberg. The nation’s oil sector has over the years been riddled with high profile corruption charges especially as it concerns non-remittance of revenue to the federation account. The former CBN governor, Samusi Lamido Sanusi, once revealed that $20 billion oil revenue was un-remitted by the NNPC to the federation account.
The recovery of these unremitted funds must be pursued vigorously by President Muhammadu Buhari particularly as the country, which currently survives under dwindling oil prices, stands in dire need of resources under a to tackle the huge and complex challenges of insecurity and poverty. While we call on the federal government to study the audit reports of NEITI with a view to implementing its recommendations after due investigations, we also suggest a probe in to the activities and finances of the NNPC and other subsidiary oil companies. The country’s anti-graft agencies, the national assembly and the Office of the Accountant-General of the Federation should collectively ensure that all un-remitted funds are recovered and paid in to the federation account. If all un-remitted funds including the N3.7trillion reported by NEITI are recovered, government would have more money to expend on capital projects as well as on recurrent overheads.