Almost six weeks after the Senate Committee on Finance submitted its report on the allegation made by the former Governor of the Central Bank of Nigeria (CBN), Mallam Sanusi Lamido Sanusi, on the non-remittance of oil revenue to the Federation Account by the Nigerian National Petroleum Corporation (NNPC), the Senate on Thursday, July 10, 2014 deliberated on the report with a resolution rejecting the recommendation abolishing fuel subsidy.
The report was the fallout out of the committee’s investigation into Sanusi’s allegation that NNPC had failed to remit $49.8 billion to the federation account over a 19-month period.
The committee, in a report on the probe of Sanusi’s allegation, which was contained in a letter he wrote to President Goodluck Jonathan in September last year, had submitted that neither $49.8 billion nor $20 billion was missing as alleged by Sanusi who is now the Emir of Kano.
According to the report, which was submitted on May 28 by the committee chairman, Senator Ahmed Makarfi, the committee said it could not reconcile how the former CBN governor came about the non-remittance of $49.8 billion to the Federation Account.
Specifically, the committee said it found that the CBN, NNPC, Ministry of Finance and Ministry of Petroleum Resources had reconciled $47 billion of the unaccounted revenue from the outset, adding that the sum had been remitted to the Federation Account.
Sanusi, while appearing before the committee on December 18, 2013, had withdrawn the earlier allegation of the unaccounted $49.8 billion, saying NNPC only failed to remit $12 billion. He later revised the figure to $10.8 billion, before revising the amount for the third time to $20 billion.
“The CBN governor at the first hearing had put forward the figure of US$12 billion as monies to be reconciled but changed his position to US$20 billion at subsequent hearing.
“At the conclusion of his written submission, he posited that it could be US$20 billion, US$10.8 billion or anything in between,” the report said.
However, the committee asked NNPC to remit the sum of $218.0 million considered as the Federation Account’s share of third party financing as well as $447.8 million, which it described as the Federation Account’s share from the $6.815 billion liftings by NNPC on behalf of its subsidiary, the Nigerian Petroleum Development Company (NPDC).
It also asked the corporation to refund $262 million which the committee described as expenses incurred by the NNPC in respect of holding strategic reserves and pipeline maintenance and management cost/capital expenditure, saying it could not satisfactorily defend it.
The report also said the total kerosene subsidy paid by NNPC, but not appropriated for by the National Assembly between 2012 and 2013 was $4.430 billion, adding, however, that the amount might exceed this figure because the certification by the Petroleum Products Pricing Regulatory Agency (PPPRA) for the period was on an interim basis.
On the expenditure incurred by the corporation on subsidy which was not captured by the Appropriation Act, the committee advised Jonathan to prepare and present to the National Assembly a supplementary budget “to cover the expenditure in the sum of N90.6 billion for PMS (premium motor spirit) subsidy 2012 and the sum of N685.910 billion for kerosene subsidy expended without appropriation by the National Assembly”.
During the debate on the report yesterday, senators condemned Sanusi’s decision to make allegations before verifying the facts. They also expressed disappointment over NNPC’s decision to spend money on subsidy without appropriation, describing it as a breach of the constitution, which they said was unacceptable.
They also condemned what they described as the disharmony, distrust and lack of coordination among the Ministries of Finance and Petroleum Resources as well as NNPC and CBN.
While some of the senators supported the recommendation for the removal of fuel subsidy, others opposed it, saying the fuel subsidy was the only benefit accruable to ordinary citizens.
Instead, they said the government should ensure adequate punishment for those defrauding the nation under the guise of the fuel subsidy regime, even as they lamented that a number of cases against subsidy fraud seemed to have been abandoned in the court.
When the matter was eventually put to vote, the recommendation for subsidy withdrawal was thrown out.
The Senate also took a share of the controversy surrounding the alleged unremitted funds, saying it was regrettable that the legislature was unaware of the financial crises in government institutions until Sanusi raised the allegation.
“This report has exposed not only the executive, but also the legislature. All those times, the legislature went to sleep and public servants became a law unto themselves, spending money without appropriation.
“That speaks a lot about us. Because of what has happened, Mr. President must take the necessary action; all of us here are privileged, but most Nigerians are not.
“It is high time we do not play politics with this report. We need to stand on authority that we can’t take this any longer,” Senator Ahmed Lawan (Yobe North) said.
Also speaking, Senator Ayogu Eze (Enugu North) who accused various government institutions of working at cross purposes, accused the former CBN boss of exalting the institution above the government which appointed him and blamed the trend on a breakdown of communication among the relevant agencies.
He supported the removal of subsidy along with Senator Heinekken Lokpobiri (Bayelsa West).
But Senators Adegbenga Kaka (Ogun East), Smart Adeyemi (Kogi West) and Abdul Ningi (Bauchi Central), dismissed calls for fuel subsidy removal and tasked Jonathan to find out among his appointees and workers who engaged in unconstitutional spending with a view to ensuring that they are adequately punished.
Kaka said since some amount of money was recommended for refund, it might not be totally right to say that no amount of money was unaccounted for.
The senators also said it was regrettable that Nigeria had failed to put in place effective refineries, resulting in the importation of petrol after exporting crude oil, as they resolved that henceforth, no unappropriated funds should be spent on the fuel subsidy.
They also warned PPPRA to stop certifying subsidy payments if they are not appropriated.
The Senate also mandated the finance committee to follow up and obtain the forensic audit report from the Auditor-General of the Federation once the audit has been concluded and report back to the Senate.
Earlier, Senator Sadiq Yar’Adua (Katsina Central) called for the postponement of the debate on the report, saying the issues therein were weighty and required more time to study, alleging further that the report showed that the president had committed impeachable offences.
But Senate President, David Mark ruled him out of order, saying the insinuation was unnecessary.
In his remark, Mark commended the committee for what it described as its courage to delve deeply into the issues and yet remained objective in its report.
He also echoed Lawan’s comment that the legislature could not exonerate itself from the entire controversy, noting that the episode was a failure of the legislature in its oversight functions.
He further said if at all the subsidy should be removed, it must not be sudden but should be a product of enlightenment for a long period of time.
