NEITI Audit: Finance Ministry, NNPCL Clash Over Unanswered Queries

The Federal Ministry of Finance on Thursday accused the Nigerian National Petroleum Company Limited (NNPCL) of failing to make available financial records needed to respond to queries raised against it in the 2021–2023 Oil and Gas Sector Audit Report by the Nigeria Extractive Industries Transparency Initiative (NEITI).

The Permanent Secretary of the Ministry, Mr Raymond Omachi, made the accusation while appearing before the Senate Committee on Public Accounts to respond to several financial infractions raised against the Ministry in the NEITI audit findings.
One of the infractions contained in the report concerns the $3 billion pre-export financing loan taken in 2012 to settle subsidy payments. According to NEITI, the recovery of the loan from monthly Federation revenue proceeds under the pre-export financing and Project Eagle agreement remains unclear.
Another query raised by NEITI is that in 2021, the sum of $722.6 million was paid to NNPC by Nigeria Liquefied Natural Gas (NLNG) as dividends and interest earned by the Federation, but the money was neither remitted to the Federation nor properly accounted for.
NEITI also observed that none of the refineries was operational in 2021 despite N200 billion reportedly spent on them. The Ministry could not provide an answer to the observation, just as it was unable to explain the $221.283 million overhead costs incurred by NAPIMS in 2021.
Responding to the queries, the Permanent Secretary said the Ministry was not directly involved in all the dealings or transactions and that the agencies involved, particularly the NNPCL, had refused to cooperate with it by providing accurate records.
“We don’t have direct involvement in all the issues raised and required provision of financial records from the affected agencies, particularly NNPCL, NUPRC etc., is not there.
“In resolving the financial issues, we have engaged a reputable external audit firm, Arthur Andersen LLP, to carry out forensic audit on all the transactions for required reconciliation,” he said.
However, the committee, chaired by Senator Ibrahim Hassan Dankwabo (Gombe North), questioned the Permanent Secretary on when the forensic audit report would be ready, after the deadline had already been extended twice, from six months to one year.
Omachi, however, insisted that the NNPCL and NUPRC should be made to appear at the same session with the Ministry of Finance to address the issues.
He said: “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.”
But the Chairman of the Committee directed the Permanent Secretary to arrange the meeting with the affected agencies, stressing that the issues were not only being followed in Nigeria but also internationally.
“I will 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.
“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,” he said.