Over $17.64 billion (about N2.7 trillion) was spent by the NNPC on joint
venture cash calls in 2005-2008, according to extractive industries
watchdog NEITI, and the funds passed through what the Senate committee
is now calling an illegal account.
Finance Minister Ngozi Okonjo-Iweala
yesterday told the joint Senate committees on Petroleum Resources
(Downstream), Appropriation and Finance that she was aware of the
account but not its signatories.
The Accountant-General of the Federation, Mr. Jonah Otunla, said he did not know anything about the account.
Group managing director of the Nigerian
National Petroleum Corporation, Mr. Andrew Yakubu, for his part, said
the Central Bank of Nigeria (CBN) was the signatory to the account.
However, the Senate panel told him that
the apex bank had in several previous meetings with the committee denied
having anything to do with the account.
Describing the account as
unconstitutional, committee chairman Senator Magnus Abe said the
government was committing an illegality by maintaining the account and
by spending from it without seeking the approval of the National
Assembly.
He said all federally accrued revenue ought to be paid into the Federation Account as required by law.
Abe said NNPC has been operating the
J.P. Morgan account to save proceeds from crude oil sales while the
Federal Government draws the monies at will.
This, he added, is a violation of the Constitution. He also said it fuels hostilities between the states and Federal Government.
“That account cannot be legally
maintained because the proceeds from the sales of crude oil ought to be
paid directly to the Federation Account,” Abe said.
“It is against the constitution to keep
the monies in an account with J.P. Morgan. Even if it is paid into that
account, there should not be a withdrawal without the approval of the
National Assembly.
“So, even transferring it back into the
Federation Account is unconstitutional. NNPC is a creation of law. So, I
don’t see how any commercial law could now overtake our constitution.
Whatever commercial exigency that made that possible is clearly against
the constitution and it cannot go on.”
Abe said Section (80) (4) of the 1999 Constitution makes it illegal to lodge the monies in the J.P. Morgan account.
But he did not say how much was being saved in the offshore account, nor did he mention the date that the account was opened.
Responding, Okonjo-Iweala said though
she was aware of the existence of the account, she did not know details
of the signatories and the account number.
However, on November 1 last year,
Executive Secretary of the Nigerian Extractive Industry Transparency
Initiative (NEITI), Mrs. Zainab Ahmed, told a legislative hearing that
the account was being used by the NNPC and CBN to save oil receipts.
Part of the funds was used to fund joint cash calls, and for transfers to the Federation Account, she added.
Mrs. Ahmed said, “The proceeds from the
sale of the crude oil and gas including other receipts are received into
CBN/NNPC JP Morgan Crude Oil and Gas Revenue Account. From this
account, NNPC transfers money to JV cash call account and the balance
swept to the Federation Account each month. These transfers and
sweepings are carried out by CBN on receiving instructions or mandates
from NNPC.”
Yesterday, the Abe-led committee urged
for a stoppage of the account “because it has caused problems between
the states and the Federal Government.”
It also asked the NNPC chief to ask his director of account to appear before the committee today for explanation on the account.
