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Market Digest Nigeria

Finance

RMAFC alleges non-remittance of $21b to Federation Account by NNPC

The Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) has accused the Nigeria National Petroleum Corporation (NNPC) of failing to remit over $21 billion revenue to the Federation Account.

In a report submitted to the House of Representatives Committee on Public Accounts, the agency said the money was paid into the NLNG dividend account which the NNPC spent without remitting it to the government coffers.

The RMAFC has asked the House to investigate the withdrawals.

The House Committee on Public Accounts led by Rep Wole Oke, consequently invited the Group Managing Director of the NNPC, Mr. Mele Kyari, to clear the air on the issue. He is yet to respond to the invitation.

The document said: “from the $21.686 billion revenue that accrued into the NLNG dividend account from 1999 to 2020, the NNPC expended $20,300,772,850 from the account leaving a credit balance of $1,384,875,073.39 as at June 30, 2020.”

The report added that “$100 billion was generated by NLNG in sales revenue since inception. The company also paid over $18 billion as dividends through NNPC and $6.1 billion as Company Income Tax (CIT) through the Federal Inland Revenue Service (FIRS).

“In addition, the company also said that over $15 billion has been expended by NLNG for the purchase of feedstock gas for its operations.

“Furthermore, between April, 2002 and March 2007, the company paid a sum of $450,000 as Licence Fees and as sum of N28,696,259.30 as NLNG Licence Renewal between the period 1999 and 2017 to the Department of Petroleum Resources (DPR).

“With respect to the payment of dividend, the NLNG reported that it has fully paid all dividends due to the Federation Account to NNPC”.

The report also gave a breakdown of the NLNG income tax payment from 1999 to 2020; sum of $1,301,544,000 was paid in 2014; $1,491,992,000 paid in 2015; $625,331,000 paid in 2016; $304,669,000 [aid in 2017; $704,182,000 paid in 2018; $907,754,000 paid in 2019 and $764,143,387 paid in 2020.

“It may be important to state that the Commission in the discharge of its monitoring mandate visited the NLNG in August, 2008, March 2013 and has consistently requested NNPC to remit all dividends received from NLNG to the Federation Account.

“Information available to the Commission indicates that a sum of $21,685,647,923.39 accrued into the NLNG Dividend Account from inception to 30th June, 2020.

Giving details of how NNPC disbursed the $20.3 billion, the report said the NLNG secretariat got $1,854,041.47; NLNG scheme 4 top up got $159.250 million; Brass LNG Scheme funding got $574,420,529.92; West African Gas Pipeline got $259,900,409; N-Gas (Takoradi, CEB Account, Gas Monitoring Station got $9,433,400; Trans-Sahara Gas Pipeline got $1,278,810.50; Olokola LNG got 216,928,550.55 while security project got $1.520 billion.

The report also stated that: the sum of $4,372,371,348.19 was transferred to Federal Government of Nigeria; Product Importation Loan to NNPC worth $5 billion; $3,335,335,760 spent on Paris Club Refund; Sovereign Wealth Fund got $1.050 billion; $1.200 billion for 2016 JV Cash Call Balance and $2.6 billion spent on National Fuel Support Fund.

In its recommendation, the RMFAC said it  “does not support any diversion of revenue that should accrue to the Federation Account for whatever reason, as the practice is illegal and conflict with section 162(1) of the 1999 Constitution (as amended).

“That the NNPC or any other agency does not have the powers under the law to withdraw money from the NLNG Dividend Account for any other purpose outside remitting it into the Federation Account”.

THE GUARDIAN
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