Commodities, Currencies, Emerging Markets, Energy, Frontier Markets, Stocks

Nigeria’s State Oil Firm Accused Of Withholding $25B From Government

Nigeria FX

The Nigerian National Petroleum Corporation (NNPC) owes the Nigerian government $25 billion in back payments on revenue generated from the sale of crude oil, according to the country’s fiscal watchdog agency.

Ibrahim Mohammed, a spokesman for Nigeria’s Revenue Mobilization, Allocation and Fiscal Commission (RMAFC), released a statement Monday saying the NNPC’s unremitted liability was from the 2011-15 period. The Guardian obtained a copy of the statement.

Nigerian President Muhammadu Buhari came into power a year ago after promising voters he would crack down on corruption at the NNPC and break up the massive organization into several smaller agencies. Shortly after assuming office, Buhari fired the NNPC’s board and named himself the country’s petroleum minister. He has yet to appoint new members to the board.

Nigeria is Africa’s largest oil producer. The latest figures from the Organization of the Petroleum Exporting Countries show oil exports from Nigeria worth about  $77 billion per year. But about two-thirds of Nigerians live below the poverty line, leading many to believe corruption at the state oil company is to blame for the discrepancy, according to Reuters.

The accusations levied by the RMAFC are just the latest in a string of charges against the state oil company. A joint report from Transparency International and Revenue Watch from 2011 found that the NNPC has a horrendous record of transparency issues. And in 2014, Nigeria’s central bank governor, Lamido Sanusi, accused the company of withholding $20 billion from the government between January 2012 and July 2013. Sanusi was subsequently suspended from his position within the central bank.

Under Nigeria’s constitution, the NNPC must give all the money it makes to the government, which then pays the oil company back based on a rate set by the parliament. The law does, however, allow the NNPC to pay for operational costs before handing over the money.

That rule may soon change, though, as parliament is expected to start debating amendments to the Petroleum Industry Bill next week. The plan will overhaul the industry and encompasses taxes, revenue sharing and environmental rules, among other things.

The intent of the amendments is to bring more transparency to Nigeria’s petroleum industry, which accounts for around 70 percent of the country’s income.

Courtesy of VOA NEWS

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