How Jonathan, Obasanjo, Looted $12billion NLNG Funds
Nigeria earned at least $11.8 billion as dividends from the Nigerian Liquefied Natural Gas Company, and not $5.6 billion as claimed by former Nigerian governments led by the People’s Democratic Party, Elombah.com learnt today. The Nigerian authorities has so far refused to provide details of how much was paid into the fund from 2004, since the Olusegun Obasanjo administration.
Controversy over the money started in June when the Nigerian Extractive Industry Transparency Initiative, NEITI, announced that it had uncovered that the NNPC failed to remit $11.6 billion paid by the NLNG.
NEITI urged President Muhammadu Buhari to recover the money.
President Muhammadu Buhari had vowed that billions of dollars stolen from government coffers by past government officials would be recovered by his government. However, the Presidency said President Buhari will limit his probe only to the immediate past government of Dr Goodluck Jonathan.
He also had vowed to arrest and prosecute former ministers and government officials who looted funds and stole Nigeria’s crude oil. Buhari, who said the suspected officials stashed the funds in foreign bank accounts, said this during his three-day visit to the United States.
A Nigerian online media, PREMIUM TIMES said they arrived at the $11.8 billion figure based on an analysis of payments to Agip, exclusively sourced by the paper.
“The figure covers remittances due to have been paid to the Nigerian National Petroleum Corporation, NNPC, which holds 49 per cent shareholding in the NLNG, on behalf of Nigeria”, Premium Times said.
The remaining equities are held by Dutch firm, Shell, and its Italian counterpart, Eni/Agip.
Investigations showed that the Federal Government, through the NNPC, earned $11.8 billion (about N2.5 trillion) as dividends from NLNG between 2004 and 2014.
The NLNG operated for at least 10 years under a controversial tax freedom holiday, called the pioneer status, which was granted by the Nigerian government. The incentive is usually given pioneer investors in new sectors of the economy to encourage more investments. In the case of NLNG, it was to trigger investment in gas.
Even with the tax relief, the government and other shareholders drew dividends from NLNG during the period.
Responding to the report, the NNPC spokesperson, Ohi Alegbe, said the matter had already been referred to the Inter-Ministerial Task Team (IMTT) for reconciliation and resolution.
“At the last meeting of IMTT, it was resolved that the Minister of Petroleum, Chairman of NEITI, Executive Secretary of NEITI and the Group Managing Director of NNPC should meet on the issue of NLNG dividends and report back to IMTT.
“Unfortunately, that meeting has not held. However, another meeting of IMTT is coming up next week and the issue will be taken up from there. NEITI, as a member of IMTT, is aware of the ongoing efforts to reconcile and resolve the issue of NLNG dividend remittance,” Mr. Alegbe said in a statement June 10.
He did not confirm or deny the amount in question, Premium Times said.
Recall that Edo State Governor, Comrade Adams Oshiomhole had accused the former President Goodluck Jonathan administration of illegally refusing to transfer funds remitted to it by the Nigerian Liquified Natural Gas (NLNG) into the federation account.
According to him, with the renewed transparency being returned to the system by President Muhammadu Buhari, Edo State would have gotten N10 billion consecutively in four years of the Jonathan administration.
In July, the new federal government said it was disbursing $2.1 billion out of the NLNG funds to cash-strapped state governments to enable them clear backlogs of salaries owed workers.
The distribution was the first time in Nigeria’s history. It is the first time that funds from NLNG would be shared between the federal and state governments.
The ruling All Progressives Congress accused the previous PDP government of diverting past remittances, an allegation denied by the PDP.
APC spokesperson, Lai Mohammed, said over $4 billion of the NLNG money was outstanding.
In its response on July 12, the PDP said the party’s previous administrations –from Obasanjo to Goodluck Jonathan— deserved praise than rebuke for saving the LNG funds for the new government.
The party’s spokesperson, Olisa Metuh, said since NLNG had been on a “10-year tax haven” (he probably meant tax holiday) until 2014, “successive governments, right from President Olusegun Obasanjo never shared nor tampered with the cumulative dividends over the years”.
He said as of May 29, when Mr. Jonathan left office, the NLNG dividend stood at a cumulative $5.6billion and “not a single cent was ever taken from the funds”.
Relevant government agencies had rebuffed repeated attempts to confirm that figure. The Corporate Communications manager of NLNG, Tony Okonedo, said releasing the details to PREMIUM TIMES would amount to a breach of confidentiality.
“Any details on the dividends we (NLNG) paid to government, the best place to go is NNPC that received it. For us, we are very clear on what we paid,” he said.
On it’s part, the NNPC told the paper that the corporation did not have any information on dividend payments by NLNG. “Your best bet for such information would be NLNG, which made the payment,” Mr. Alegbe said.
Neither the NLNG nor the NNPC was forthcoming with information on their annual report and financial statements. The ministry of finance and office of the accountant general also refused to provide details.
But according to Premium Times, Eni’s financial filings confirmed that the company received billions of dollars as its due of dividend since 2004. Eni owns 10.4 percent of NLNG, while Nigeria holds 49 percent stake. A review of Eni’s consolidated financial statements showed that the company received €2.319 billion ($2.5 billion) as total dividends billion between 2004 and 2014.
Eni received €72 million in 2004; €33 million in 2005, €56 million in 2006; and €131 million in 2007.
The company also earned €453 million in 2008; €101 million in 2009; €188 million in 2010; €483 million in 2011; €331 million for 2012; €224 million in 2013, and €247 million in 2014. At 49 per cent, Nigeria’s dividend climbed to $11.8 billion. That is about N2.5 trillion.
The figure tallies with the $11.6 billion reported in the Nigerian Extractive Industries Transparency Initiative (NEITI) 2009-2012 Audit Report. The little difference might be as a result of fluctuating exchange rate.
Still, there is a discrepancy as previous reports show that the NLNG had announced in 2014 that it paid a total $13 billion as dividend to the government.
The firm’s managing director, Babs Omotowa, stated this when the company celebrated its 3,000th LNG export cargo in Abuja, in March.
He said Nigeria now owned $14 billion of assets on Bonny Island; $13 billion in dividends, another $11 billion earned in feed gas sales revenue, over $10 billion expenditure in local economy on goods, services and salaries of thousands of staff employed.
Speaking on the matter, governor Oshiomhole regretted that his state lost N10billion under the former accounting order of Jonathan and former finance minister, Ngozi Okonjo-Iweala. He said, however, that Nigerians have always been happy with President Buhari because he had been very clear from day one on his campaign promises “about putting an end to impunity and fragrant disobedience of law and order”.
Oshiomhole explained that the NLNG was not just starting to remit, as it had been doing that every year plus taxes paid by Shell, amounting to about $500 million.
He said the $500 million added to the amount of $1.6 billion from NLNG was what totalled to the amount of $2.1 billion that was shared in the first week of July.
Noting that the remitted NLNG funds were not been transferred to the federation account, Oshiomhole said, “what was extraordinary is that the NLNG has over the years been remitting funds to the federal government. But the federal government illegally refused to transfer these funds to the consolidated revenue fund which belongs to the three tiers of government.”