August 13, 2022

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Facts emerges that NNPC remitted $2.7bn to its CBN accounts in six months

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Despite claims by the Governor of Central Bank of Nigeria, Mr Godwin Emefiele, that the crisis being experienced by the Naira was due to non-remittances by the Nigerian National Petroleum Company Ltd, fresh facts revealed that the national oil company actually remitted a whopping sum of $2.7bn into its account with the apex bank during the first six months of this year.

The inflow into the NNPC’s account with the CBN, according to records seen by this website, was made between January and June this year.

The CBN has in a report titled: “The forex question in Nigeria: Fact sheet”, accused the NNPC Ltd of being behind the Naira crisis in Nigeria.

Specifically, the report stated that “domestically, there has been zero-dollar remittance to the country’s foreign reserve by the NNPC.”

But investigations by this newspaper showed that out of the $2.7bn remittance into the NNPC account with the CBN, the sum of $645m was for dividend paid by the Nigerian Liquefied Natural Gas Company Ltd, while $1.786bn was remitted from the operational activities of the NNPC Ltd.

Further analysis showed that the sum of $18,770,418.97 was remitted into the NNPC account with CBN in January, while February, and March had inflows of $194, 563, 276. 49 and $373, 232,875.20 respectively.

Investigations further revealed that in the month of April, the inflow into the NNPC’s account with the apex bank was $247,884,295.52, May $591, 565, 425. 41 and June $880, 906, 761.81

Recall, this newspaper had reported how the Naira had depreciated to its lowest level in history to about N730 a dollar on the parallel market under the leadership of Emefiele as the CBN Governor.

The apex bank governor had in recent times put the blame of the declining value of the currency on different stakeholders.

For instance, in 2018, the CBN Governor said that the huge appetite of Nigerians for importation was responsible for the declining value of the Naira. He thereafter placed a ban on Forex accessibility for importation of 41 items.

In July 2021, Emefiele also hit at Bureau De Change (BDC) operators accusing them that their illegal forex trading was having a negative impact on the Naira.

In September 2021, Emefiele blamed Aboki FX for the naira depreciation the country had suffered then and threatened to arrest the brain behind the forex intelligence firm.

Early this year, the CBN governor again blamed the Naira depreciation on activities of those involved in money laundering, financing of terrorism as well as politicians.

This week, he has shifted the blame to the Nigerian National Petroluem Company Ltd.

The National Youth Council of Nigeria (NYCN) had while reacting to the latest onslaught of the CBN Governor claimed that he has been working with opposition political parties and other groups to sabotage the Nigerian economy under President Muhammadu Buhari.

The Group made the accusation in a statement issued on Sunday and signed by its President, Solomon Adodo.

In the statement which was made available to THE TOP SOCIETY, the NYCN claimed that the poor economic management policies of the apex bank under the leadership of Emefiele was responsible for the recent free-fall of the naira.

The NYCN said in the statement that the inability of CBN to promptly release Joint Venture (JV) cash-call funding from the Treasury Single Account (TSA) even when the NNPC had adequate cash cover, had led to loss of JV Partners’ confidence to restore production and reap the benefits of today’s improved oil prices.

Adodo said in the statement that as of date, over three months dollar-denominated cash call payment amounting to over $400m properly processed are yet to be paid by CBN.

The group flayed Emefiele for completely failing to concentrate on his core mandate of price stability as a CBN Governor, pointing out that with inflation hitting about 19 per cent and the exchange rate at close to N750 to a dollar, the CBN governor has pushed more Nigerians into poverty.

The action of the CBN governor, the statement said, negates President Muhammadu Buhari’s objective to take 100 million people out of poverty.

He said, “The combined impact of CBN’s inability to promptly release JV cash-call to restore production, the increasing losses due to crude oil theft and production deferments has culminated to significant crude oil output losses of over 600, 000 barrels per day.

“At the current year-to-date average crude oil price of $107 per barrel, Nigeria is counting opportunity loses translating to over $64m per day, and a monumental impact of about $2bn per month.

“To its credit, NNPC has recorded significant gains on production ramp up including attaining ‘first oil’ production from the Anyala – Madu Fields and most recently Ikike fields which cumulatively boost national oil production by almost 80, 000 barrels per day.

“Furthermore, NNPC’s efforts towards attaining additional combined production of over 100, 000 barrels from fields like Obodo , Utapate etc has never abated despite the global setback recorded as a result of the effects of COVID-19 pandemic.”

He added, “In 2021, Emefiele blamed Aboki FX for the naira depreciation the country suffered then, it thereafter blamed members of the Association Bureau De Change, which led to the stoppage of dollar sales to the group, at another time, Emefiele blamed the naira depreciation on activities of money laundering, financing of terrorism as well as politicians.

“Today, he has shifted the blame to the NNPC. This is clearly a case of a bad workman who blames every other person for his inability to deliver.”

The Group alleged that since his failed presidential bid, Emefiele has been working with various groups in the opposition to sabotage the government .

The statement added, “To us at the NYCN, Emefiele is tired and should be relieved of his appointment.

“From all indications since his failed presidential bid as well as his rejection by the All Progressives Congress, a partisan Emefiele has been doing all to rubbish the achievements of President Muhammadu Buhari.

“There are also allegations that Emefiele has been hobnobbing with the opposition Peoples Democratic Party since his failed presidential bid.

“We are all witness to the fact that from August 2020 to July 2022, official exchange rate has moved from N381 to N415/$, representing only nine per cent increase.

“However, the parallel market has moved from N470 to N710 within the same period representing 51 per cent increase and a record 71 per cent arbitrage with the official exchange rate creating a huge incentive for round tripping, price gouging, sharp market practices and inflation.

“The NYCN is therefore shocked by the comment of the Governor associating the free-fall of the parallel market rates to NNPC, even though it is purely a monetary policy issue and outside the purview of the NNPC.

“We advise that the CBN considers among other options, the World Bank’s recommendation of adopting a single market-responsive sustainable exchange rate, improving access to forex through well-defined periodic forex auctions and signaling a renewed commitment to price stability as a primary goal of the apex bank.”

According to Adodo, Emefiele and the CBN were aware of OPEC’s reduction of Nigeria’s oil production quota which led to reduction of the country’s production level from 2.1 million barrels per day to 1.4 million in May 2020.

Furthermore, Adodo pointed out that insecurity and huge oil theft in the Niger Delta have continued to challenge the oil industry, causing massive losses and declaration of force majeure across the country’s major onshore production export facilities of Bonny, Brass and Forcados.

The NYCN president also stated that Nigeria’s rising petrol subsidy cost as well as rising cost of external debt servicing are all obligations affecting the economy.

These, it added, affected the NNPC’s remittances to the Federation Account. From January to June 2022, the cost of Premium Motor Spirit subsidy rose to N2.2trn.

Subsidy is being estimated to hit N5trn and N6trn in 2023.

“Apart from government decision to defer the implementation of PMS deregulation, the subsidy profile is significantly influenced by CBN foreign exchange management,” he added.

The NYCN president also drew the attention of Nigerians to the decision by Emirates Airlines, flag carrier of the United Arab Emirates (UAE), to reduce its flight operations to Nigeria over the inability of the CBN to repatriate about $85m in revenue.

“Was the failure to repatriate Emirates funds also caused by the NNPC,” Adodo queried.

The International Air Transport Association (IATA) had said Nigeria was withholding revenue worth about $450m earned by foreign airlines operating in the country.

Emirates said the planned reductions in its operations in Nigeria would take effect from August 15, 2022.

Adodo added, “Emirates clearly stated in that its letter to the Minister of Aviation that it made every effort to work with the CBN to find a solution to this issue and its Senior Vice-President met with the Deputy Governor of the CBN in May and followed up on the meeting by letter to the Governor himself the following month, however no positive response was received.

“The NYCN views this development as embarrassing to the federal government.”

However, the NYCN leader expressed optimism that the NNPC’s transitioning into a limited liability entity in line with the provisions of the Petroleum Industry Act (PIA) and its regulation now in line with the provisions of the Companies and Allied Matters Act (CAMA) would help resolve cash call payments delays as the company is now exempted from TSA, among others.

Also, the company would be able to compete favourably with its peers globally. This, it added, would translate to more foreign exchange to the country as well as improved national energy security.

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