The Ministry of Finance has accused the Nigerian National Petroleum Company Limited (NNPCL), of failing to provide critical financial records needed to respond to queries raised in the 2021–2023 Oil and Gas Sector Audit Report of the Nigeria Extractive Industries Transparency Initiative (NEITI).
The Permanent Secretary of the Ministry, Mr. Raymond Omachi, made the allegation on Thursday when he appeared before the Senate Committee on Public Accounts to respond to several financial infractions identified in the NEITI audit findings.
One of the major issues raised by NEITI concerns a $3 billion pre-export financing loan obtained in 2012 to settle subsidy payments.
According to the audit report, the recovery of the loan from monthly Federation revenue proceeds under the Pre-Export Financing and Project Eagle agreements remains unclear.
NEITI also queried the payment of $722.6 million in dividends and interest by the Nigeria Liquefied Natural Gas Limited (NLNG) to NNPC in 2021.
The audit report stated that the amount, which belonged to the Federation, was neither remitted to the Federation nor properly accounted for.
The Ministry was also unable to provide satisfactory answers to NEITI’s observation that none of Nigeria’s refineries was operational in 2021 despite about N200 billion reportedly spent on them.
Another unresolved issue involved $221.283 million in overhead costs incurred by the Nigerian Petroleum Investment Management Services (NAPIMS) in 2021.
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Responding to the queries, Omachi said the Ministry of Finance was not directly involved in all the transactions and had experienced difficulties obtaining accurate records from the relevant agencies, particularly the NNPCL and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
“We don’t have direct involvement in all the issues raised and the required provision of financial records from the affected agencies, particularly NNPCL, NUPRC, etc., is not there,” he said.
The Permanent Secretary disclosed that the Ministry had engaged Arthur Andersen LLP, an external audit firm, to conduct a forensic audit of the transactions and reconcile the accounts.
However, the committee, chaired by Senator Ibrahim Hassan Dankwambo (Gombe North), questioned the Permanent Secretary on when the forensic audit report would be ready, noting that the deadline had already been extended twice, from six months to one year.
Omachi subsequently called for the NNPCL and NUPRC to appear alongside the Ministry before the committee to enable all parties to address the outstanding issues.
He said the Ministry had encountered difficulties in bringing the affected agencies to the table and urged the committee to use its powers to compel their appearance.
“I know you have enormous powers that you can use to compel these agencies to appear before us. We are having challenges bringing them to the table so that we can resolve these issues.
“We in the Federal Ministry of Finance are ready to come and sit with them here, so that you can hear directly from them and obtain the necessary explanations and clarifications,” he stated.
In his response, Senator Dankwambo directed the Permanent Secretary to review the Ministry’s internal report and arrange a joint meeting involving the Ministry of Finance, NUPRC, NNPCL and any other relevant agency.
The committee chairman stressed that the issues raised by NEITI had implications beyond Nigeria, noting that they were being monitored internationally.
“Therefore, if there are records or issues that need to be clarified and properly put in order, we should do so in the interest of our country,” he noted.
The committee’s directive is expected to pave the way for a joint appearance by the affected agencies, as the Senate seeks clarification and accountability over the unresolved financial issues contained in the NEITI audit reports.
