Transparency: NEITI Questions NNPC Documentation

The Nigeria Extractive Industries Transparency Initiative (NEITI) has said that NNPC has yet to provide documentation showing that the presidency authorized the firm to withhold and disburse funds paid to it as dividends by the Nigeria Liquefied Natural Gas (NLNG) Ltd. This is based on NEITI’s audit of NNPC in 2015.

The audit report released at the end of 2017 that the state-run firm had not clarified with irrefutable evidence that proceeds amounting to almost $17 billion, was allowed by the presidency to be kept by it and disbursed.It explained the accumulated monies were paid to the corporation over a period of 15 years, starting from 2000 and 2017.

“NLNG paid a total of $1,076,011,598 to NNPC as loan repayments, interest, and dividend. The dividend that accrued to the government in 2015 was $1,043,764,965 representing 97% of the total revenue stream from NLNG. While interest and principal repayment were $3,111,498 (0.29%) and $29,135,135 (2.71%) respectively. The total of payments from NLNG to NNPC from 2000 to 2015 was $16, 898, 725, 000,” said the NEITI report.

NEITI noted that when its auditors requested to know the status of the funds and evidence of approval to withhold it, the NNPC said instruction from the presidency authorized its hold income from NLNG on trust and to administer same as directed by the government.

“Instruction from the Presidency authorizes NNPC to hold income from NLNG on trust and to administer same as directed by the government. The Federal Government authorized NNPC to hold NLNG dividend for investments in other gas projects and any other disbursement therefrom is accordingly approved by the Federal Government (President).

“All receipts in respect of the NLNG dividend by NNPC are being held in trust for the government and administered as directed by the government. The government and relevant agencies are periodically provided with updated reports showing full details of the funds and the bank accounts where they are domiciled upon request,” the NEITI quoted NNPC to have said in the audit report.

Making its recommendations however, NEITI stated: “NNPC needs to provide documentary evidence on the claim that the Presidency authorised NNPC to hold income from NLNG in trust and to administer same as directed by the government. The status and utilization of funds from this account need to be disclosed by NNPC.”

Previously, the NEITI had argued that the NNPC could not rely on claims that the presidency authorised it to withhold NLNG remittances because the monies belonged to the federation account from which the government’s seed investment in the NLNG came from.