You are here: HomeBusiness2021 09 11Article 476212

Business News of Saturday, 11 September 2021

Source: punchng.com

NNPC denies using federation account to achieve first profit

Mele Kyari Mele Kyari

The Nigerian National Petroleum Corporation has said it did not tamper with the federation account to declare its first profit of N287bn in 44 years.

The corporation’s Group Executive Director, Finance and Account, Ajiya Umar, said this on Friday during a programme on Channels TV.

The President, Major General Muhammadu Buhari (retd.), had on August 26 announced a net profit of N287bn reported by the NNPC for the 2020 financial year from a loss position of N1.7bn in the previous year.

The corporation published its 2020 Audited Financial Statements on Wednesday, and revealed that its revenue declined by N916bn from N4.63tn in 2019 to N3.72tn in 2020.Some critics have accused the corporation of tampering with the federation account to declare profit.

Umar said, “That is a false statement. It is impossible for NNPC to dip its hands into the federation’s revenues. First of all, there are interagency reconciliations every month as to what revenue accrued to the federation from the joint venture crude sales.“Secondly, we have a resident revenue director from the office of the Accountant General of the Federation in the NNPC Towers who monitors what accrues to the federation on behalf of the Accountant General.

“Thirdly, there is the pre-Federation Accounts Allocation Committee post mortem meeting to which reconciliations are done, and finally at FAAC meeting where the Commissioners of Finance of all the 36 states and the FCT meet to review contributions from all revenue generated.According to Umar, the National Assembly steps in occasionally when the accounts are sent to the Public Accounts Committee to review how much each revenue agency, including NNPC, has brought into the coffers of the government.

“So, with all these layers of control, it will be impossible for NNPC to dip its hands; NNPC will account for the revenues of the federation and only deduct what is allowed and what has been appropriated by the National Assembly in relation to cost of bringing the barrels out as well as cost of other projects that are being done on behalf of the Federation,” he said.

He explained that the NNPC profit originated from the writeback of N713.4bn.He said, “This has to do with an impaired revenue, which was actually reclaimed against the federation and this was subjected to forensic audit and subsequently reviewed by an inter-ministerial agency committee and finally by the National Economic Council. Such revenue was now recognised in 2020.“By virtue of the International Financial Reporting Standard guidelines, we could have recognised that in our books until such monies or revenues are received within the coffers of the federation.”