Reacting to allegations over alleged diversion of NLNG dividends over the years, NNPC GMD, Mr Mele Kyari, in a video posted on the NNPC Twitter handle, said it was impossible not to remit funds to the federation account.VERDICT: Records, available evidence shows Mr Kyari’s claim is FALSE.
Last week, the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mr Mele Kyari, claimed that it was ‘practically impossible’ to divert dividends and other oil revenues meant for the federation account. But this contradicts records and evidence, so what’s what?
Background:Non-remittance of NLNG Dividend, Oil Revenue by NNPC
The National Assembly is currently investigating years of unremitted dividends and oil revenue from Nigerian Liquefied Natural Gas (NLNG). The Chairman of the Senate Committee on Finance, Senator Olamilekan Adeola, alleged that the NLNG’s dividends were neither paid into the Consolidated Revenue Fund of the Federation nor any traceable account of the Federal Government.
In September 2020, the lower chamber of the National Assembly – the House of Representatives Committee on Public Accounts also summoned Group Managing Director (GMD) of the Nigerian National Petroleum Corporation (NNPC), Mele Kyari, over alleged withdrawal from the NLNG dividend account.
Meanwhile, the Senator Bukola Saraki-led National Assembly had also in 2018 vowed to investigate the diversion of the dividend by the NNPC.
The lawmakers referenced a document submitted by the Revenue Mobilisation, Allocation and Fiscal Commission (RMAFC) accusing NNPC management of ‘illegal withdrawals from the NLNG’s dividends account’.
While lawmakers did not publicly disclose the said document, various records have also alleged non-remittance of the NLNG dividend by NNPC. Ultimately, the financial statement of one of the NNPC’s subsidiaries and the annual fact sheets of NLNG also proved GMD Kyari wrong.
Verification
We split Mr Kyari’s statement into two: “The @nigeriaLNG accounts are TSA accounts domiciled with the @cenbank.” And, “So, it is practically impossible not to remit money into the Fed. Account”.
1. As claimed by Mr Kyari, NLNG accounts are on Treasury Single Accounts domiciled with the Central Bank of Nigeria.
The statement is FALSE.
In its Facts and Figures 2019 and 2020, NLNG clearly stated that it paid dividends of $37.6 billion for years. Of the figure, NNPC received 49% on behalf of the federal government, according to a document released in September 2020.
Moreover, the Nigerian government introduced TSA in 2012 with full implementation by 2015. The illegal withdrawals of NLNG dividends and oil revenue dated back to 2004. Dataphyte captured some years in an earlier report.
2. NNPC GMD, Mr Mele Kyari, claimed that ‘it is practically impossible not to remit money into the Federation Account.’
The claim is also FALSE.
Quoting words from the account statement of one of the NNPC subsidiaries, Nigeria Petroleum Development Company (NPDC), the Board of directors affirmed the NNPC borrowed $5 billion from the NLNG dividend over the years. The state-owned oil firm diverted the dividend payment to cater for fuel subsidy debt, according to the NPDC’s financial record.
While the statement is misleading, Nigerians are expecting NNPC and its management to give an accurate reflection of revenues from the oil and gas sector over the years. The illegal withdrawals and diversion have spanned over decades. At one instance, NNPC diverted dividends accrued to the federal government by NLNG to pay subsidy debts. In another case, it is currently diverting oil revenues from OML 119 for the same purpose. The OML revenue, about 20,000 barrels of crude per day, will settle subsidy debt for 12 years. The diversion started about 2012, according to NPDC financial filings.
The impact has created a lag in socio-economic development and prosperity of the nation. It has also tainted the anti-corruption mantra of President Muhammadu Buhari; further casting doubt on the NNPC’s journey to transparency with the Extractive Industries Transparency Initiative (EITI).