SUBSIDY PROBE REPORT: How NNPC, others looted subsidy fund

BY Vanguard: BEN AGANDE ABUJA—The House of Representatives Ad-hoc committee that investigated the implementation of the subsidy regime in the country, yesterday, recommended that the sum of N1,067,040,456,171.31 be refunded to the Federation Account by the Nigerian National Petroleum Corporation, marketers, companies that refused to appear before the committee as well as the Petroleum Product Pricing and Regulatory Agency.
Out of this amount, the Nigerian National Petroleum Corporation which came under heavy criticism from the Committee is to refund N310,414,963,613.00 for subsidy it collected on Kerosene after the subsidy on the product had been outlawed in the country; N285,098,000,000 for subsidy it collected above the PPPRA recommended amount and N108, 648,000,000 for self discount it granted itself while marketing companies are to refund a N8,664,352,554.00.

Nigeria's Minister of Petroleum Diezani Allison-Madueke

Companies that failed to appear before the committee are to refund the sum of N41,936,140,005 while the PPPRA is to refund the sum of N312,279,000,000 being excess payment it made to itself. The refunds are to be made within three months.
The Committee chaired by Hon. Faruk Lawan also recommended that relevant anti-corruption agencies should investigate and prosecute all persons and companies that have been found to have committed any crime while those companies that obtained foreign exchange, FOREX, but failed to import petroleum products should also be referred  to the Anti-Corruption agencies with a view to verifying what they used the forex for.
And contrary to the official figure of subsidy payment of N1.3 Trillion, the committee noted that ‘the Accountant General of the Federation put a figure of N1.6 Trillion, the CBN N1.7 Trillion, while the committee established subsidy payment of N2,587.087 Trillion as at 31st December, 2011 amounting to more than 900 per cent over the appropriated sum of N245 Billion’.
It noted that the committee arrived at this figure based on the CBN figure N844.944Billion paid to the NNPC in addition to another figure of N847.942 Billion reflected as withdrawals by the NNPC from the excess Crude Naira account as well as the sum of N894.201Billion paid as subsidy to the marketers.
The committee which came hard on the Nigerian National Petroleum Corporation ‘for not being accountable to anybody or authority’ recommended that the corporation be unbundled to make its operations more efficient and transparent, adding that ‘the Management and Board of the NNPC should be completely overhauled and all those involved in the following infractions should be further investigated and prosecuted by the relevant anti corruption agencies’.
See who to refund what? here
The infractions for which the committee recommended further investigation/prosecution are: Payment of N285.098Billion in excess of the PPPRA recommended figure for 2011; subsidy deductions of N310,414,963,613 for kerosene against a presidential directive; Direct Deductions from funds meant for the federation account in contravention of section 162 of the Nigerian Constitution and the illegal granting of price differential (discounts) of crude oil price per barrel to the NNPC to the tune of N108.648Billion from 2009-2011.
Wants NNPC audited
It further recommended that ‘the House do direct for the auditing of the NNPC to determine its solvency. This is as a result of plethora of claims of indebtedness and demands for payments by NNPC’s debtors which, if not well handled, will not only affect the entire economy of Nigeria but also the supply and distribution of petroleum products.
On the part of the PPPRA, the committee recommended that ‘the Executive Secretaries of the PPPRA who were the Accounting Officers, and under whose watch abuses were perpetrated that led to the government losing Billions of Naira should be held liable. We strongly recommend that those who served as Executive Secretaries of PPPRA from January 2009 to October 2010 should be further investigated/prosecuted by relevant Anti-corruption agencies. This should also include the GM Field Services, ACDO/Supervisor Ullage Team 1 and ACDO/Supervisor Ullage Team 2 within the same period for their roles in the management of the ullaging under the subsidy scheme.
Part of the committee report reads: “Our investigation further revealed that certain marketers collected subsidy of over N230.184 Billion on PMS volume of N3,262,960,225 litres that from the records made available to us were not supplied. Apart from proliferation and non-designation of bank accounts for subsidy payment, PPPRA and the OAGF were unable to manage in a transparent manner the two accounts they chose to disclose. There were indications that PPPRA paid N258billion to itself in 2009 and N157Billion in 2010. When confronted, the OAGF was unable to submit details of the bulk payments arrogated to PPPR A and the account from which the bulk sums were disbursed to the supposed beneficiaries.
“Curiously too, the particular Accountant General that served during the period 2009 was found to have made a payment of equal installments of N999 Million for a record 128 times within 24 hours on the 12th and 13th of  January 2009, totalling N127.872Billion. The confirmed payments from the CBN records were made to beneficiaries yet to be disclosed by the OAGF or identified by the committee. We however discovered that only 36 marketers were participants under the PSF scheme during this period. Even if there were 128 marketers, it was inconceivable that all would have imported the same quantity of products to warrant equal payment” the report noted.
On the quantity of fuel that is consumed nationwide daily, the committee in its report noted that from its findings, ‘the consumption level for 2011 is estimated at 31.5 million litres per day. However, in 2012, marginal increment of 1.5 million litres a day is recommended in order to take care of unforeseen circumstances, bringing it to 33 million litres per day.
“And to maintain a strategic reserve, an additional average of seven million litres per day (or 630 Million litres per quarter) for the first quarter of 2012 only is recommended. Thus PPPRA is to use 40million litres of PMS in the first quarter as its maximum ordering quantity per day. In subsequent quarters, PMS daily ordering quantity should be33 million litres per day for Kerosene, the committee recommends a daily ordering quantity of 9 million litres” the report noted.
It therefore proposed a budget proposal of N806.766 Billion for the 2012 fiscal year for payment of subsidy on PMS and Kerosene based on its projection that the PMS consumption is 40million litres per day (including the strategic reserve for the first quarter of 2012); and 9million litres of Kerosene per day.
Other recommendations by the committee:
*Marketers without storage facilities and retail outlets should be excluded from participating in the PSF scheme.
*The services of the Accounting Firm of Akintola Williams, Deloitte and Olusola Adekanola and Partners should be discontinued with immediate effect for professional incompetence and should be blacklisted from being engaged by any Federal Ministry, Department or Agency for a period of three years.
*All those in the Federal Ministry of Finance, Office of the Director general Budget and the Office of the Accountant General of the Federation involved in the Extra budgetary expenditure under the PSF scheme (2009-2011) should be sanctioned in accordance with civil service rules and the code of conduct Bureau.
*The overhauling of the PPMC management.
*Mr. president should reorganize the Ministry of Petroleum Resources to make it more effective in carrying out the much needed reforms in the oil and  gas sector.
*Given the large and complex nature of the Ministry of Petroleum Resources, the committee recommends that two ministers should be appointed to take charge of the Upstream and Downstream.
*The PPPRA should provide the Nigerian Navy and NIMASA advance copies of allocation and vessel arrival notification documents to enable the navy monitor, track and interdict vessels seeking to avoid Naval certification.
*The committee recommends that the regulatory capacity of PPPRA be strengthened and the National Assembly should commence the process of amending the Act to make the Agency autonomous
*The committee recommends that FIRS should follow up on the companies listed earlier to pay their taxes with due penalties in line with the provisions of the Companies Income Tax Act.
*The PSF guidleines should be revised to make Tax compliance a mandatory pre-qualification requirement for all participants under the scheme.
*The CBN and the Federal Ministry of Finance should critically examine and review policy guiding payment for importation of petroleum products to  avoid the current fraudulent system that allows importers to bring in products from off-shore ‘lome’ or cotonou to qualify for forex payments
*The committee recommends that the PPMC management be overhauled.

LIKE US ON FACEBOOK

Govt kicks as US issues Boko Haram warning

By The Nation: Onyedi Ojiabor, Sanni Onogu and Vincent Ikuomola, Abuja 

A MERICA issued yesterday a Boko Haram attack warning. But the Federal Government said security agents are prepared for such challenges. Should any country have doubts, it should contact the Nigerian authorities, the government said.
The U.S warned its citizens living in Nigeria that Boko Haram is planning attacks in major hotels in Abuja. 
“The U.S. Embassy has received information that Boko Haram may be planning attacks in Abuja, Nigeria, including against hotels frequently visited by Westerners,” an emergency message on its website said yesterday.
“The Nigerian government is aware of the threat and is actively implementing security measures.”
The U.S. authorities issued a similar warning in November, naming the Hilton, Sheraton and Nicon Luxury as Abuja hotels that could be targets for Boko Haram, but it later retracted it.
The Federal Government said then that high profile hotels were always a possible target but security was tight and people should not live in fear. However, occupancy at those hotels dipped after the last U.S. warning.
The embassy did not name specific targets this time. The Hilton in Abuja said it always took security seriously.
But the Federal Government expressed concern over the security alarm raised by the U.S.
Information Minister Labaran Maku at the end of yesterday’s Federal Executive Council meeting in Abuja, cautioned the media against inadvertent support for terrorists and their activities through their reporting.
Maku said there was nothing new in the US warning, noting that it is similar to the one issued about a year ago.
While stating that the Federal Government concedes to every country the duty to ensure the safety of its nationals, the minister, however, said this must be done in such a way that it would not create panic in Nigeria.
Maku said: “I still appeal that if they (foreign governments) have any doubt about the preparedness of our security agencies to tackle insecurity in the country, they should communicate to us.
“Our security agencies have increased their capacity to respond to these threats here in the FCT and other parts of the country and other places of public interest. We will continue to appeal to all foreign agencies to align more with our security agencies. Security does not come from such measure (such statements).”
Maku added: “The media need some time off; it appears to me that we get a lot of panic from sensational reports. We have a responsibility in this country to have some discernment on the time and space we give to anti-state groups.”
“I believe it is wrong; I believe it is creating panic and hate across the country.”
Boko Haram’s purported leader, Abubakar Shekau, has appeared in two al Qaeda-style videos posted on the Internet this year but has made only vague threats and no clear demands.
The Senate yesterday asked President Goodluck Jonathan to crush the Boko Haram insurgents at all costs.
This followed a unanimous adoption of a motion entitled “Terrorist attack on Kaduna”, sponsored by Senator Sani Saleh (Kaduna Central) and 10 others.
Tension was high amidst emotional outbursts as the motion was being debated.
The lawmakers specifically dwelt on the Easter Sunday blast in Kaduna. More than 40 people died in the attack.
The Senate specifically called on the Executive to recognise that terrorists have declared war on Nigeria, which is a threat to the sovereignty, existence and economic wellbeing of the country.
The lawmakers resolved to ask the Federal Government to “respond (to the development) with all instruments of national power at its disposal”.
They condemned bomb explosions in parts of the country in its entirety and observed a one-minute silence in honour of those who died in the explosions and other attacks across the country.
The Senate mandated its joint committees on National Security, Intelligence, Defence and Army, and Police Affairs and Interior to intensify their oversight functions over the security agencies with a view to improving their capabilities in handling the security challenges.
However, the prayer that the government should compensate to victims of the Kaduna bomb explosion was rejected.
In his lead debate, Senator Saleh urged the Senate to note with deep sense of grief, the dastardly bomb explosion at Junction Road in Kaduna on Easter Sunday, by some suicide bombers.
He noted that the explosion was a stark reminder of last year’s Christmas Day attack that left dozens of people dead in Madalla, Niger State.
He observed that terrorist attacks continued unabated nationwide despite the assurances of our security agencies of “being on top of the situation”.
He said that the Easter bomb explosion in Kaduna claimed 13 lives, injured 32 people and destroyed property worth millions of naira, bringing untold hardship on victims, their relatives and residents of the city.
The prayer that the federal government should be asked to recognize that “these terrorists have declared war on Nigeria, which is a threat to our sovereignty, existence and economic wellbeing and to respond with all instruments of national power at its disposal” was unanimously adopted by the lawmakers.
Senator Ahmed Makarfi (Kaduna North) described the bomb blast as sad.
He said: “It is a problem concerning all of us; we should volunteer information to security agencies to be able to arrest the situation. All measures including dialogue, should be used by government to solve the problem,” Makarfi said.
Senator Gyang Dalong Datong (Plateau North) said: “This country is going through a very sad moment because every Nigerian that is killed is either a brother or sister.”
Senator Olubunmi Adetunbi (Ekiti North) noted that the Senate has refused to pass a vote of no confidence on any security outfit.
He said: “Nigerians are tired of condemnation, of bombings and observations of one minute silence. One of the questions Nigerians are asking is: ‘Do we have a government?’”
The poser led to an uproar in the Senate.
Deputy Senate President Ike Ekweremadu, who presided, said: “Let’s take the matter with the seriousness it deserves. Let us allow our colleague to express his opinion. This is the high point of democracy.”
Senator Enyinnaya Abaribe noted that the country is at war. 
He said: “When you are at war, you do the needful. Security agencies have to step up to the challenge. They attacked the security agencies first in the North, which made them duty bound to protect themselves and in the process protect the citizenry. “
Senator Gbenga Ashafa (Lagos East) said something must be done about children who are affected psychologically. 
Senator Mohammed Magoro said: “What we are facing is a very serious situation.”
He added:  “It is because we have not been following the trend of events. Kano, Kaduna and Borno are at a standstill. Training and acquisition of modern equipment is necessary for security. Security agencies are doing their best. Physical checking of vehicles cannot take you anywhere.”
Ekweremadu said: “The most important business of government is the protection of lives and property and that is fundamental. If we need to even borrow money to deal with this security challenge that needs to be done.”

LIKE US ON FACEBOOK

Nigeria’s break-up won’t hurt us, says North

By The Nation: Tony Akowe, Kaduna

 

 Professor Ango Abdullahi

Northern leaders yesterday spurned agitators for a Sovereign National Conference (SNC), where they intend to determine the continued co-existence of the regions.

They said the region has nothing to lose if the country breaks up and the North goes its own way.

The regional leaders said the North has not gained anything from the present arrangement of the country and would not be hurt by any break-up.

The northern leaders, under the aegis of the Arewa Elders’ Forum (AEF), said though they could survive in a divided Nigeria, they would not be the cause of the break-up.

A leader of the new group and a former Special Adviser to former-President Olusegun Obasanjo on Food Security, Prof. Ango Abdullahi, told the Hausa Service of the British Broadcasting Corporation (BBC), monitored in Kaduna, that the North has always been on its own and could survive without the oil resources from the South.

The former Vice-Chancellor of the Ahmadu Bello University (ABU), Zaria, was reacting to calls from southern leaders for the convocation of an SNC.

He said some people are hiding under the agitation to show that they are tired of staying in a united Nigeria.

Abdullahi said: “We know this is an old call, because it has been on for over 20 years. They have been saying the corporate existence of the country and the federal system is faulty. They are keen on sitting down to discuss what kind of arrangement would be conducive for Nigerian. Some people are hiding under the guise of this agitation to show that they are tired of staying in a united Nigeria. 

“Therefore, we have resolved that we are not going to be the cause of Nigeria’s break-up. But if others decide that the country should be divided, we would not say no, because there is nothing we are getting from the current arrangement that other sections of the country are not getting.

“If they insist, why do we not sit down and talk? If in the end everybody agrees that Nigeria should should break up, let it be.”

He said the North has always been on its own because the poor in the region have always been on their own.

Abdullahi said: “The poor feed themselves from what they cultivate in the farms and feed Nigeria up till tomorrow. It is possible that all northerners could return to what their forefathers did through agriculture, with which proceeds they built the North and Nigeria.

“The land is still there and the water. Our forefathers built all the factories, the textiles, the oil mills in Kano from agricultural proceeds. God has given us fertile land. So, if we return to what we have, we would not lack. We will surely stand on our own, no matter the situation this country finds itself.” 

 He lamented the state of insecurity in the country and reiterated their resolve to work towards the continued existence of the nation.

LIKE US ON FACEBOOK

Nigeria safe for investors despite attacks - Jonathan

By The Nation: Agency Reporter

 

German Chancellor Angela Merkel and Nigerian President Goodluck Jonathan speak to the media after talks at the Chancellery on Thursday. Photo:Getty Images

President Goodluck Jonathan insisted on Thursday Nigeria was safe for foreign investors, while calling for Western logistical help to combat the Boko Haram sect.
The group, which wants Sharia (Islamic) law more widely applied across Africa's most populous nation, has killed hundreds in gun and bomb attacks this year.
This week, the United States embassy in Nigeria warned its citizens that the group might be planning attacks on the capital Abuja.
"We are building up our security infrastructure... I can say we are on top of this problem," Reuters quoted Jonathan as saying at a joint news conference with German Chancellor Angela Merkel in Berlin after talks that focused on trade, energy and security issues.
Asked what kind of assistance Germany could provide, he said: "In areas of training manpower and modern equipment... You need superior technology to fight terrorists and we think Germany and others can help us in such areas."
Boko Haram usually targets police, authority figures and churches in the mostly Muslim north, although there have been a handful of deadly attacks in and around Abuja, which is home to ministries and foreign embassies.
Jonathan, who is a Christian from the southern, oil-producing Niger Delta, has been criticised by Nigerians and foreign diplomats for not curbing violence in the north.
The Nigerian government has dismissed the U.S. embassy warning of fresh attacks in Abuja, saying such statements created, "undue panic".
"I can assure the global community, especially investors from Germany, that the government is working very hard to bring this problem under control," Jonathan said.
"Nigeria is still safe for investment. Nigeria is one country where... investment returns are quite high and where we believe in the rule of law."
With 70 percent of its population below the age of 35, Nigeria offers a vibrant market for investors, he added.
Merkel said Germany stood ready to provide logistical and other support in the fight against Boko Haram.
She also urged Jonathan to provide a better business climate in his country.
As well as Boko Haram and other security challenges such as piracy off its coast, Nigeria's reputation among investors also suffers from rampant corruption, a patronage culture and dilapidated infrastructure.

 LIKE US ON FACEBOOK