Politics NNPC Audit: No Missing $20 Billion – Bloomberg

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The long-anticipated audit of the NNPC has arrived – and like everyone else, you are probably looking to see what it shows in light of former CBN Governor-now Emir Sanusi Lamido Sanusi’s accusation of corruption.

If you were hoping for a scandal, you might be a bit disappointed as PricewaterhouseCoopers LLP (the auditors) have stated that while the NNPC is using an ‘unsustainable model’, there really isn’t much to look at in their books.

The audit itself spanned the period between January 2012 and July 2013 (18 months) and was released on Thursday by Nigeria’s Auditor General.

The report essentially says that the Nigerian National Petroleum Corp (NNPC) cannot sustain monthly remittances to the government or meet the operational costs it incurs from crude revenue, and to fund the gap it incurs third-party liabilities.

The NNPC needs to plug all holes and should refund a minimum of $1.48 billion to the government, says the report.

To put it in Auditor General Ukura Samuel’s words, “PwC therefore recommended that the NNPC model of operation must be urgently reviewed and restructured. The current model which has been in operation since the creation of the corporation cannot be sustained.”

As Nigerians would recall, this audit came after the sensational whistle-blowing by the former CBN governor, Sanusi, who wrote to the President in 2013 to say the NNPC was withholding at least $50 billion in revenue that should have been handed over to the government. Since then that figure has undergone various mutations – first adjusted to $12 billion during a news briefing with Dr. Okonjo-Iweala and afterwards raised to $20 billion during a Feb. 4 meeting with lawmakers.

The NNPC, through it all, denied the allegation.

This singular event led to Sanusi’s suspension. He was suspended for ‘financial recklessness and misconduct.’

The Audit Puts Everyone in the Clear

(Probably) heaving a sigh of relief and emboldened by the audit report, Ohi Alegbe, an NNPC spokesman in Abuja, has said: the audit “has absolved the NNPC of culpability over the allegation of non-remittance of $20 billion. The $1.48 billion was never in dispute as it is made up of statutory payments such as signature bonus, taxes and royalties which are statutory payments that come with assets acquisition.”

Contrary to the $67 billion earlier reported by the NNPC, the total crude sold during the period audited was %69.3 billion, which doesn’t look like much of a big deal until put into perspective as Bismark Rewane, CEO of Financial Derivates did when he said “but $1.5 billion in naira terms is over 200 billion naira. That’s more than some states will budget for their entire year.”

“The system shouldn’t allow money to be unaccounted for, it tells you that there are inconsistencies in the system,” he said.

Political Gambit?

The release of the report is coming about week to the elections, which means President Jonathan will no longer be criticized for the NNPC debacle, and Rewane shares this sentiment.

“The level of impunity is just annoying,” he said. “Nothing should be missing in the first place.”

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