By Adams Cooke
The article by the former Governor of the Central Bank of Nigeria, CBN and the new Emir of Kano, Alhaji Sanusi Lamido Sanusi, published last week in the Financial Times, made fascinating reading not least because of his amazing ability to reach conclusions totally at variance with those reached by the writers of the forensic report themselves, Pricewaterhouse Coopers. This is a trait that has sadly followed the former Governor of the CBN.

During the time of the whistle-blowing, public opinion was summarised on a television breakfast programme in February 2014, by two leading Nigerian lawyers. Liborous Oshomah was of the opinion that the government fell out of favour with Sanusi because the suspended governor’s tenure was characterised by crisis and inconsistencies.

Oshomah stressed that many of the decisions taken by Sanusi, while in office, were controversial. He mentioned the issue of the banking crisis which resulted in several banks folding up and thousands of workers being laid off, stressing that banks are still unable to recover from it. While commenting on the controversies exposed by Sanusi, Oshomah said the suspended governor waited until the near end of his tenure to hit the government he was a part and parcel of.

On his part, Kenneth Odidika described Sanusi as a “very brilliant man who seemed not to appreciate the enormity of the responsibilities of the office he occupied.” Odidika went ahead to label the suspended governor a ‘talkative’ whose good diction and spoken English and “musical voice” is mere theatrics from Hollywood. He said: For a Central Bank governor to be in every forum, talking both about the economy and all things that are not related to the economy, was unbecoming of a Central Bank Governor.”

He added: “It is rare to see a Central Bank governor, anywhere in the world, speak as inconsistently as Mr. Sanusi.”

Entitled, “Questions on Nigeria’s stolen billions,” Sanusi was his usual pompous, prescriptive self: praising his personal efforts at blowing the whistle on the alleged $20 billion scam at the NNPC, rewriting history and acting as prosecutor, judge and jury.

“Nigerians did not vote for an amnesty for anyone. The lines of investigation suggested by this audit need to be pursued. Any officials found responsible for involvement in this apparent breach of trust must be charged,” he said.

He was wrong

One hopes that his royal highness is also ready to face the truth, as he also cannot hide under amnesty. The truth is that he was wrong when he first wrote his letter to the Presidency insisting that $49 billion was missing. He was wrong when he reversed the figure to $12 billion and he was certainly wrong with his insistence that $20 billion was not remitted to the Federation Account.

Every panel that has investigated this matter had reached a different conclusion than that reached by Mr. Sanusi, yet he clings to his rather unsupported allegations.

The inter-ministerial committee that first tried to unravel the mystery noted a few discrepancies but said no fraud was involved. The Senate committee chaired by Senator Ahmed Makarfi discovered no wrong doings and concluded after exhaustive sessions that money was not stolen. Needless to say, that report was wholly adopted by the upper legislative chamber.

However, when Mr. Sanusi and other conspiracy theorists wouldn’t let the matter lie, one of the leading auditors in the world, Pricewaterhouse Coopers, were contracted to investigate.

What the report says

So what did the report say? In an analysis by Edward Owono on May 11, 2015 in the Tribune, PwC found that there was indeed a shortfall between the amount ($69.34billion) the NNPC received from crude oil lifting and total cash ($50.81 billion) that the NNPC remitted to the Federation Account for the period January 2012 to July 2013. However, the report then goes on to state clearly that the “NNPC has provided information on the difference leading to potential excess remittance of $0.74billion”. In other words, NNPC actually paid more, NOT LESS, than what was due from it into the Federation Account!

The report showed that NNPC ran its expenses from the money it received from crude oil and remitted the balance to the Federation Account in accordance with the law which set it up. PwC found that the expenses NNPC actually ran were more than it had deducted from crude oil receipts. So on that ground, it was the FGN that owed NNPC money and not vice versa.
Sanusi Lamido Sanusi former CBN Gov now Emir of Kano Muhammad Sanusi II

Sanusi Lamido Sanusi former CBN Gov now Emir of Kano Muhammad Sanusi II





The PwC audit report, however, finds that there is some money that the NNPC has not duly paid to the Federation Account. This is not from the crude oil lifting that sparked the CBN governor’s missive. Rather, it is from two quite unrelated heads, namely $1.75 billion as signature bonus for divested assets and $0.47 billion for unpaid self-assessed taxes and royalties of NPDC (a wholly-owned NNPC subsidiary).

After offsetting the $0.74 billion that NNPC had overpaid on crude oil lifting into the Federation Account, the net balance owed by NNPC to the Federation Account was $1.48 billion.

Some challenging accounting

So did the report say that any money had been misappropriated or anyone corrupt? No. It attested to some challenging accounting but did not highlight any fraud or monies that could not be accounted for. Even where the report said NNPC was challenged to explain NNPC’s selling of DPK to bulk DPK marketers at N40.90 rather than the regulated ex-depot price of N34.51, it immediately provided the explanation of the miscellaneous charges (including bridging, transport and administration) that accounted for the difference.

The report also said that given the amount deducted from crude oil lifting to defray NNPC expenses in the audited period and the fall of crude oil prices by over 60 per cent since June 2014, NNPC’s ability to fund its operations was in peril since NNPC had no independent sources of revenue, other than from crude oil lifting receipts, meet expenses.

The report recommended that the “NNPC model of operation must be urgently reviewed and restructured, as the current model which had been in existence since the creation of the Corporation cannot be sustained”.

This is a point that was made clear by the minister in the first few months of her appointment sparking the review of the Petroleum Industry Bill that had been sitting in abeyance for 12 years before her appointment. The PIB is still sitting in the “House” awaiting passage into law.

Unrealistic weight of subsidy payments

The minister also mooted the unrealistic weight of the subsidy payments from the federation accounts, all in a bid to stem corruption inherent within the system, introduce accountability and transparency; but she was met by a strong opposition and protest as she touched on a “sore point”. Many appear to have a short memory about these valiant attempts by the minister to bring sense into a flawed system. Yet she seems to be the one many point fingers to when a perceived loophole is identified.

So to summarise, the report actually highlighted that the NNPC seemed to operate within its constitutive law by deducting money from crude oil lifting to defray its expenses. The report confirmed that the expenses so deducted accounted for the difference between the amounts that NNPC received and the amounts that NNPC paid to the Federation Account. The report did say that the law should be changed so that NNPC pays all the money it receives to the Federation Account (without deductions) and looks for other (commercial) ways to meet its expenses. But the report clearly acknowledged that the current model had been in existence since the NNPC was created.

The report did not say that any law had been broken. The report definitely did not allege corruption on the part of any party, person or body. It did not mention the minister in any unfavorable light or even insinuate any wrongdoing on her part or departure from the legal and legitimate norm. The shortfall in remittance that the report found was a mere accounting event. The money is not missing and the minster had since instructed the NNPC to make the necessary remittance.

So, why is there still such sectional aggression to prove that somehow the PwC report indicts the minister in some way?

Questions about entire subsidy regime

There is no doubt that there are questions about the entire subsidy regime. Many would in fact agree that the unremitted funds could have been put to better use. But as the NNPC Group General Manager, Group Public Affairs Division, Ohi Alegbe, said recently, neither the minister nor the NNPC could be blamed for not following a law that was never gazzetted.

“The process of implementing the Presidential directive was not followed through by the Minister of Petroleum Resources at that time as required by law, which technically meant that kerosene subsidy was not removed.

“Why the royal father appears hell-bent on hanging a tag of corruption on the Corporation even when all the inquiries into his allegation of unremitted funds have proved otherwise remains a mystery to us,” Mr. Alegbe added.

There is a point at which Mr Sanusi ought to have let this matter lie. He crossed that point long ago and he seems determined to keep going until his viewpoint is vindicated. It is his prerogative to use his time as he pleases – though one had thought that as the emir of one of Nigeria’s largest city, he would have little time for waging his vendetta against a woman minister.

He has, however, succeeded in taking charge of the narrative of his suspension from the CBN which, according to the Financial Reporting Council of Nigeria, was due to the following: ‘’The persistent refusal and negligence to comply with public procurement act in the procurement practices of the CBN; unlawful expenditure by the CBN on intervention projects across the country, deploying huge sums of money as the CBN did under the watch of Mallam Sanusi without appropriation and outside the CBN’s statutory mandate.”

Readers will do well to remember the real reason behind the royal father’s exit.

- See more at: http://www.vanguardngr.com/2015/05/sanusis-misreading-of-forensic-report/#sthash.2uOi06H8.dpuf

When the managers of the NNPC are in court for corruption, they can submit this as a defence.

Mogidi:

When will all these long Grammar become short with meaning

I can't help but marvel when some analysts speak or write articles on the "missing fund" issue. In all fairness and honesty, Judging by the Modus Operandi of Government Parastatal in Nigeria you don't need anyone to tell you that Corrupt activities were going on at the NNPC. You might dismiss that statement as my personal opinion, that won't be argued but let's take a look at available facts. The audit report starts by telling the readers that the audit conducted was carried out in a manner not consistent with the standard procedure of auditing practices. Then it later states that documents needed to conduct a decent and reliable audit where not made available to the auditor by the agencies required to do so. Also this same audit report stated clearly that there were no proof for several claims of payment for services and expenditures made by the NNPC. These few key points should tell an objective and honest observer that something is wrong somewhere, some people are trying desperately to cover up their tracks. Taking all measures possible to ensure that the true nature and extent of the robbery, looting, squandering, misappropriation and mismanagement of accountable public fund is not made public. You only just need a little bit of honesty and maybe a pinch of objectivity to admit this. All that is needed at this moment is to carry out a proper audit furnished with all necessary documents to actually determine wether it is true or not that the alleged money is missing or wether those in charge of managing these funds should be exonerated and absolved of all allegations.