Participants at an ongoing probe by the Senate committee on public accounts investigative hearing into the audit reports of the Nigerian Extractive Industries Transparency Initiative (NEITI) covering the 2021–2023 period.
The Federal Ministry of Finance has blamed the Nigerian National Petroleum Company Limited (NNPCL) for its inability to provide records needed to respond to financial 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, Raymond Omachi, made the disclosure on Thursday while appearing before the Senate Committee on Public Accounts to answer questions arising from financial infractions contained in the NEITI audit report.
Among the issues raised was a $3 billion pre-export financing loan obtained in 2012 to settle subsidy payments. NEITI said the recovery of the loan from monthly federation revenue proceeds under the pre-export financing and Project Eagle agreements remained unclear.
The audit report also questioned the payment of $722.6 million by Nigeria LNG Limited (NLNG) to NNPC in 2021 as dividends and interest earned on behalf of the Federation. According to NEITI, the funds were neither remitted to the Federation nor properly accounted for.
The ministry also could not immediately provide answers to NEITI’s observation that none of the country’s refineries was operational in 2021 despite about N200 billion reportedly spent on them.
Another outstanding query concerned $221.283 million in overhead costs incurred by the National Petroleum Investment Management Services (NAPIMS) in 2021.
Responding to the queries, Omachi stated that the Federal Ministry of Finance was not directly involved in all the transactions under review and had encountered difficulties obtaining the relevant financial records from the agencies responsible for the transactions, particularly the NNPCL.
“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 also disclosed that the ministry had engaged an external audit firm, Arthur Andersen LLP, to conduct a forensic audit of the transactions and reconcile the outstanding issues.
The Senate committee, chaired by Senator Ibrahim Dankwabo, however, questioned the delay in completing the forensic audit after the ministry had twice extended the period for the exercise, from six months to one year.
Omachi subsequently indicated that the NNPCL and the Nigerian Upstream Regulatory Commission (NUPRC) appear alongside the Ministry of Finance before the committee to provide explanations on the transactions under review.
“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,” he said.
The permanent secretary added that the Ministry of Finance was ready to meet with the affected agencies before the committee to provide the necessary explanations and clarifications.
However, the committee chairman directed the permanent secretary to facilitate a meeting involving the Ministry of Finance, NUPRC, NNPCL and any other relevant agency.
Senator Dankwanbo said the issues were of international interest and should be resolved in the interest of Nigeria.
“I would like you to review the internal report and arrange a meeting involving the Ministry of Finance, the NUPRC, NNPC and any other agency whose participation is necessary to resolve the issues we have raised,” he said.
“As you are aware, these issues are being followed by the international community. They are not matters confined to Nigeria; they are in the public domain and are being monitored by people across the world. 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. All of us have no other country except Nigeria.”
