HOUSE COMMITTEE SUMMONS FINANCE, JUSTICE MINISTERS OVER UNDECLARED $2.4bn OIL SALE
The house of representatives’ committee investigating $2.4bn undeclared oil sale has summoned the minister of finance, budget and national planning, Zainab Ahmed, Attorney general of the federation/minister of justice Abubakar Malami and stakeholders in the petroleum industry to appear at its hearing or face the consequences of further refusal to heed the invitation.
The summon came on the heels of failure of the officials to appear before the committee on Tuesday at the opening of a 3- day investigative hearing on the alleged loss of over $2.4 Billion in revenue from illegal sale of 48 million barrels of crude oil export in 2015 including all crude oil exports and sales by Nigeria from 2014 till date
Chairman of the committee, Honourable Mark Gbillah Said it was unfortunate that the officials did not attend the hearing despite receiving formal invitations to do so with regards to the whistle-blower policy saddled with the ministry of finance and office of the attorney-general of the federation.
He said that with regards to the issue of crude oil, the committee expects the Nigerian National Petroleum Company Limited, the Nigerian Upstream Petroleum Regulatory Commission, the Nigeria Extractive Industries Transparency Initiative, oil and gas companies who operate fields and engage in exports, Office of the Accountant-General of the Federation and the Accountant-General himself, including the Budget Office of the Federation, to be present and provide clarifications on the issues under investigation.
“There are certain individuals as well that we need to investigate. Certain whistle-blower revelations show that from the Paris Club refund, hundreds of millions of dollars were paid into company accounts without any record of whatever services they provided to the country. These are things that need to be investigated.
“There are allegations that fugitives from their country in India are being harboured in Nigeria and are involved in Nigeria’s crude oil exports in the oil and gas industry, when they are wanted by the anti-graft agencies in their country, with specific regards to certain individuals that we have communicated to and we believe that these individuals appear, in the absence of which the committee would be constrained to exercise its statutory powers under the law to compel appearance before the committee.”
“In the light of dwindling revenue accruing to Nigeria from crude oil sales, it was quite alarming to learn about whistle-blower allegations that over $2.4bn in possible revenue by the country was lost from the sale of 48 million barrels of Nigeria’s crude oil cargoes in China.
“So, there have been responses that we have received from the Office of the Accountant-General which show that the Honourable Minister of Finance has been approving payments to whistle-blowers in percentages at variance with what the policy says they should be paid.”
He said that “there have been allegations of the office of the attorney-general of the federation being involved also in the receipt of funds from outside the country without these funds being remitted to the federation account in line with the provisions of the constitution”.
“There have been allegations that the expenditure of these recoveries has also been done in complete violation of the provisions of the Constitution.”
He disclosed that some content of memo from Central Bank of Nigeria ( CBN) accused ministries, departments and agencies of the federal government of illegal spending of public funds.
“The CBN made a formal response to this committee indicating that under the Treasury Single Account (TSA) policy, and I quote, ‘of this administration, agencies operate their TSA accounts and make expenditure from these accounts without recourse to the CBN.’
“This is something that is alarming to this committee, for the CBN to declare before us – because we are cognisant of the provisions of the Constitution; that all revenues accruing to the Federation must be paid into the Federation Account.
“So, if there are recoveries being made from whistle-blower revelations, we expect those monies to be paid into the account of the federation as required by law. If any expenditure is to be made, it should come through the National Assembly. But that does not appear to be the case,” he said.
“While it is imperative to highlight that these are unverified allegations, the onus is on the House of Representatives, as a responsible House of the Nigerian people, to carry out a thorough investigation to ascertain the veracity or otherwise of these allegations, including an investigation into crude oil exports from Nigeria from 2014 to 2022, to ascertain the accuracy of recorded revenue from sales during this period, the utilisation of this revenue and identify any likely additional losses in revenue to the country.”
Earlier, Speaker of the House, Femi Gbajabiamila, while declaring the hearing open, said that the petroleum sector, particularly crude oil, is still the mainstay of Nigeria’s economy, accounting for 95 per cent of the country’s foreign exchange earnings and 80 per cent annual of budgeted revenue.
Represented by Honourable Ibrahim Isiaka, he said that while daily production of crude oil was put at 1.88 million barrels in 2022, the figure was never met with production, dropping below 1 million barrels during the year with significant revenue losses to the country; and 1.69 million barrels in year 2023.”
He explained that the probe was not a witch-hunt exercise but a constitutional responsibility within the legislative powers of the House as enshrined in Sections 88 and 89 of the 1999 Constitution, Section 2 of the Legislative Houses (Powers and Privileges) Act, 2017, and the Standing Orders of the House of Representatives.
He said that Nigeria’s revenue to Gross Domestic Products ratio is below 5 per cent, which is rated amongst the five lowest countries in the world, “and it is reported that about $700m worth of crude oil is lost to oil theft monthly in Nigeria.”
He said, “In January and July 2022 alone, Nigeria lost $10bn to the crime. Available data shows that the country may lose $23bn this year to crude oil theft, with concerns being expressed about the possibility of meeting 2023 proposed production target of 1.69 million barrels per day due to the myriad of issues militating against the attainment of this target, such as vandalism, in-accurate reconciliation, insecurity and unreasonable operational cost
The Speaker further said that “Corruption continues to be the bane of Nigeria’s development, with Nigeria ranking 150th out of 180 countries in the most recent Transparency International’s Corruption Perceptions Index. While the government, through its anti-graft agencies, continues the onerous fight against corruption, the task remains daunting and requires the cooperation of all Nigerians to curb and eventually eradicate.
“It is the practice globally for individuals with information about the existence of proceeds from illegal or corrupt actions by government officials or private individuals to volunteer such information and receive compensation when recoveries are made as an incentive to others.
“While it is commendable that this administration introduced a whistleblower policy in 2016 and has confirmed recovery of significant proceeds of corruption from its implementation, the policy is without statutory backing and the receipt and expenditure of these proceeds appear to conform to constitutional provisions and the payment of compensation does not appear to be transparent.”
He pointed out that the recommendation of the committee, after its investigation, would no doubt guide the house in making an informed decision in considering the Whistle-Blower Bill currently before it.
He assured that the legislation, when passed into law, will address a mirage of issues associated with the implementation of the policy as well as take adequate care of the whistle-blowers involved, which is very significant in the success of the policy.
