An account opened by Nigerian officials with an American bank J.P. Morgan into which billions of dollars oil monies are being paid over the years is raising dust at a Senate committee hearing on the management of the fuel subsidies.
Over $17.64 billion (about N2.7 trillion) was spent by the NNPC on joint venture cash calls in 2005-2008, according to extractive industries watchdog NEITI, and the funds passed through what the Senate committee is now calling an illegal account.
Finance Minister Ngozi Okonjo-Iweala yesterday told the joint Senate committees on Petroleum Resources (Downstream), Appropriation and Finance that she was aware of the account but not its signatories.
The Accountant-General of the Federation, Mr. Jonah Otunla, said he did not know anything about the account.
Group managing director of the Nigerian National Petroleum Corporation, Mr. Andrew Yakubu, for his part, said the Central Bank of Nigeria (CBN) was the signatory to the account.
However, the Senate panel told him that the apex bank had in several previous meetings with the committee denied having anything to do with the account.
Describing the account as unconstitutional, committee chairman Senator Magnus Abe said the government was committing an illegality by maintaining the account and by spending from it without seeking the approval of the National Assembly.
He said all federally accrued revenue ought to be paid into the Federation Account as required by law.
Abe said NNPC has been operating the J.P. Morgan account to save proceeds from crude oil sales while the Federal Government draws the monies at will.
This, he added, is a violation of the Constitution. He also said it fuels hostilities between the states and Federal Government.
“That account cannot be legally maintained because the proceeds from the sales of crude oil ought to be paid directly to the Federation Account,” Abe said.
“It is against the constitution to keep the monies in an account with J.P. Morgan. Even if it is paid into that account, there should not be a withdrawal without the approval of the National Assembly.
“So, even transferring it back into the Federation Account is unconstitutional. NNPC is a creation of law. So, I don’t see how any commercial law could now overtake our constitution. Whatever commercial exigency that made that possible is clearly against the constitution and it cannot go on.”
Abe said Section (80) (4) of the 1999 Constitution makes it illegal to lodge the monies in the J.P. Morgan account.
But he did not say how much was being saved in the offshore account, nor did he mention the date that the account was opened.
Responding, Okonjo-Iweala said though she was aware of the existence of the account, she did not know details of the signatories and the account number.
However, on November 1 last year, Executive Secretary of the Nigerian Extractive Industry Transparency Initiative (NEITI), Mrs. Zainab Ahmed, told a legislative hearing that the account was being used by the NNPC and CBN to save oil receipts.
Part of the funds was used to fund joint cash calls, and for transfers to the Federation Account, she added.
Mrs. Ahmed said, “The proceeds from the sale of the crude oil and gas including other receipts are received into CBN/NNPC JP Morgan Crude Oil and Gas Revenue Account. From this account, NNPC transfers money to JV cash call account and the balance swept to the Federation Account each month. These transfers and sweepings are carried out by CBN on receiving instructions or mandates from NNPC.”
Yesterday, the Abe-led committee urged for a stoppage of the account “because it has caused problems between the states and the Federal Government.”
It also asked the NNPC chief to ask his director of account to appear before the committee today for explanation on the account.
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