PDP Governors and the case against NNPC

 By Anselm Okolo

On Wednesday, March 23, 2022, the Peoples Democratic Party Governors Forum (PDP-GF) held a meeting in Aba, Abia State . That the Governors met, in itself, was not remarkable, as it was one of a series of regular periodic parleys. What distinguished this gathering was the forum’s apt presentation of the dire condition of Nigeria at the moment.

The agenda of the meeting covered a wide range of issues. However, the Governors speaking through Aminu Waziri Tambuwal,  Chairman  of the Forum, expressed great concern and alarm over the economy, perhaps, because of the chain reaction it has on the quality of life of the citizenry. They argued that it is a fact that the standard of living of the majority of Nigerians has fallen to the point that many families now struggle to go beyond a meal per day. 

They also agreed that the widespread poverty could be linked to dwindling resources caused by mismanagement and poor oversight of  federal government revenue generating agencies by the present administration, and raised concern and alarm over ‘’various reports and claims of incidents of stealing of crude oil ranging from 80% to 95% of production made by industry practitioners.’’ 

The Forum called on the Federal Government to ‘’set up an appropriate mechanism to reverse this trend and bring perpetrators to account.’’ 

Calling for strict compliance to fiscal laws of the country, the Governors decried the inability of the Nigeria National Petroleum Corporation (NNPC) to make its statutory contributions to the Federation Account, inspite of oil selling at above $110. The Forum has always opposed the failure of NNPC to remit revenue to the Federation Account as and at when due.

They noted that it is ‘’patently unconstitutional for NNPC to determine at its whim and discretion when and what to pay to the Federation Account, as it is a mere trustee of the funds for the three tiers of Government: Federal, States and Local Governments.’’

Furthermore, the Forum called for a probe and diligent  monitoring of  the volume of fuel consumed by Nigerians. It said, ‘’We once again, call for investigations and audit of the quantity of consumption of fuel ascribed to Nigerians and for deployment of technology at the filling stations to determine in a transparent manner the volume of consumption.

‘’We would resist any further attempt by NNPC to ascribe unsubstantiated subsidy claims to other tiers of government.’’

To further buttress their point, they cited Section.162 (1) of the 1999 Constitution of the Federal Republic of Nigeria, as amended, which stipulates that ‘’The Federation shall maintain a special account to be called “the Federation Account” into which shall be

paid all revenues collected by the Government of the Federation…,”

and S.162 (10), which states that “For the purpose of subsection (1) of this section, “revenue” means any income or return accruing to or derived by the Government of the Federation from any source and includes –

(a) any receipt, however described, arising from the operation of any law;

(b) any return, however described, arising from or in respect of any property held by the Government of the Federation;

(c) any return by way of interest on loans and dividends in respect of shares or interest held by the Government of the Federation in any company or statutory body. ” 

As of today, the Governors noted, ‘’18 (Eighteen) Federation Revenue Agencies are not paying/remitting any revenue to the FAAC Account. These include (i) Central Bank of Nigeria (ii) Nigeria Maritime Administration and Safety Agency (NIMASA) (iii) Nigeria Liquefied National Gas (NLNG) (iv) Nigeria Communication Commission (NCC) (v) Economic and Financial Crimes Commission (EFCC) (vi) NPA (vii) Security and Exchange Commission, etc.

‘’(b) FIRS and DPR take cost of collection of 4% (Four percent) of Revenue collected while Customs collects 7%. In March 2022, for instance, FIRS took N15.4 billion as cost of collection and Customs took N8.4 billion. If these are annualised, FIRS and Customs collect about N1.84 billion and Customs N100 billion per annum. Obviously, some states of the Federation’s capital budget does not come close to these.

‘’(c)  Nigeria Federation has 49% shareholding in NLNG. According to the Minister of Finance during the 2020 budget performance brief at the National Assembly stated that the federation received a dividend of N144 billion (One Hundred and Forty Four Billion) from NLNG. This figure, to the best of our knowledge, was never paid into the Federation Account.

‘’(d) NNPC deducts N8.33 billion monthly for the rehabilitation of the Refineries in Nigeria. Till date, no refinery is working.

‘’(e) On priority projects of the Nation’s oil industry, NNPC deducted N788.78 billion for various investments between 2018-2021 without recourse to FAAC.

‘’(f) NNPC, in 2021 alone, claimed to have paid over one trillion naira as petroleum subsidy. Indeed, the month of March 2022, N220 billion was deducted as oil subsidy with a promise that N328Billion will be deducted in April 2022. This is unacceptable.

‘’(g) NNPC and FIRS as well as other remitting Agencies continue to apply an exchange rate of N389/$1 as against the Import and Export window of N416/$1. The extent of this leakage can be better felt, if this rate is compared to the current N570/$1.

‘’(h) From available records about N7.6 trillion is withheld between 2012 and 2021, by NNPC from the Federation Account. All these are said to be payments for oil subsidy.’’

In conclusion, the PDP-GF declared that these ‘’leakages in NNPC have been made possible because the President is also the Minister of Petroleum.’’ The Governors, therefore, moved that the two portfolios should be separated.

But despite the gloomy economic situation, the Forum remained positive that the party will turn around the fortunes of the country when Nigerians vote the PDP back into power in 2023. It, therefore, urged all party members and leadership to remain focused and united to position the party to rescue and rebuild Nigeria in 2023.