Reps, CBN query NNPC over N25bn, $29m export supervision fund

The House of Representatives expressed displeasure over the failure of Nigerian National Petroleum Corporation (NNPC) towards payment of N25 billion into the Nigerian Export Supervision Scheme (NESS) accounts.

Oluwole Oke, chairman and members of the House Committee on Public Procurement had during the second day of the investigative hearing on the ‘alleged abuse, breach and violation of the Public Procurement Act, 2007 in the engagement of Pre-shipment Inspection Agents (PIAs)’, also frowned at the NNPC’s non-remittance of $20 million unspent fund to the Federation Account at the end of the 2016 financial year.

The lawmakers also queried the failure of the appointed PIAs for failing to carry out inspection of all export terminals where all exports carried out by NNPC at the inception of the scheme.

Exporters of crude oil including NNPC which manage Federal Government’s crude oil, are required to pay a monitoring fee of 0.12 percent of the Free on Board (FoB) value of their explorer into the scheme, domiciled with Central Bank of Nigeria (CBN) and administered by Federal Ministry of Finance in line with the provisions of the pre-shipment of imports Act, 1996.

According to documents submitted by the apex bank to the Committee, NNPC is indebted to the tune of N25 billion.

While responding to queries raised by the lawmakers, Bello Rabiu, NNPC’s representative, who differed with the N25 billion indebtedness mentioned by CBN, noted that the Corporation is currently owing N23.42 billion.

Breakdown of the money paid by the Corporation shows that: out of total sum of $163.750 million budgeted between 2009 to 2015, it paid the sum of $154,737,612 million leaving the balance of $9,012,388 while NAPIMS is yet to disburse the $20 million for appropriated 2016 budget.

“Federal Government appropriated yearly for payments of the fee for FG equity for equity oil exports. NESS budget resides in NAPIMS and funded alongside JV cash calls releases. However, this process has been revised in the light of the new zero cash call regime. It is now a line item in the Federation budget.

“Since inception of the scheme in 2009 to December 2025, FG has appropriated a total of $163.75 million as NESS fee budget for FG equity oil exports. NAPIMS has disbursed a total of $154.74 million with a total budget balance of $9.012 million.

“Conversely, the most recent reconciliation conducted by the NESS Technical Committee puts NNPC’s total NESS fee obligations during the same period at about N48.5 billion leaving an indebtedness of about N23.42 billion sine payment by NAPIMS is usually terminated upon exhaustion of the appropriated amount and upon successful completion of stakeholder’s reconciliation involving Budget Office, NNPC, PIAs, MEAs, CBN, FMF,” he explained.

In his remarks, Godwin Dauda, who spoke on behalf of Godwin Emefiele, CBN Governor explained that the Pre-shipment Inspection A (PIAs) are appointed by the President based on the recommendation of Federal Ministry of Finance.

He added that CBN as part the Technical Committee recommends an upward review of the tenure of the contracts of pre-shipment agents, stressing that the current regime of six months has led to the agents providing services without an existing contract at different times.

Dauda also told that the committee that the bank recommended a contract tenure of four to six years for the pre-shipment agents.

The lawmakers expressed worry that the pre-shipment agents appointed by the Finance ministry had worked without contracts at different periods.

A member of the Committee Gabriel Onyeweife argued that it is illegal for the pre-shipment agents to operate without  binding contracts at any point in time.

 “When you noticed this lacuna, what steps did you take as a member of the technical Committee to address it” the lawmaker asked.

In response, the CBN representatives stated that the committee wrote letters to the minister of Finance to notify her of state of the contracts of different agents and the need to regularise them.

The Committee also questioned the CBN on where the monies used to pay agents is domiciled and why the payments are made directly to agents in flagrant disregard to Sections 80 and 81of the 1999 Constitution which states that all monies be paid into the…. and subsequently appropriated by the National Assembly.

On his part, Diri Douye, a member of the Committee demanded a proper explanation of the entire payment process for pre-shipment agents.

“How are these monies housed, is it in the Central Bank of Nigeria (CBN)? How is the money paid out? This is what Nigerians want to know,” Douye said.

KEHINDE AKINTOLA, Abuja