Nigerian Auditor-General Uncovers N514bn in NNPCL Financial Irregularities

Nigeria’s oil giant, the Nigerian National Petroleum Company Limited (NNPCL), has been accused of major financial irregularities amounting to 514 billion naira in its 2021 accounts.

The Office of the Auditor-General for the Federation has uncovered a series of alleged infractions, including:

• Irregular deductions: 343.64 billion naira (£592 million) were deducted from domestic crude oil sales without proper justification.
• Sinking fund misuse: 83.66 billion naira (£144 million) in miscellaneous income was deposited in a sinking fund account instead of the designated Federation Account.
• Unauthorised deductions: 82.95 billion naira (£143 million) were deducted for refinery rehabilitation without proper authorisation.
• Unsubstantiated payments: 3.75 billion naira (£6.5 million) were paid as shortfalls from petrol sales without adequate documentation.

These findings, detailed in the 2021 audit report obtained by the BBC, indicate violations of the Nigerian Constitution and the country’s Financial Regulations.

The report states that the NNPCL failed to provide any explanations or justifications for these alleged infractions.

Key findings:

• Domestic crude oil sales: The audit found that significant deductions were made from the sale of domestic crude oil without clear explanations or supporting documentation.
• Refinery rehabilitation: Funds were deducted for refinery rehabilitation without the necessary approvals, raising concerns about the legality of these expenditures.
• Petrol sales shortfalls: Payments made to cover shortfalls from petrol sales lacked transparency and adequate documentation.

The Auditor-General has recommended that the NNPCL CEO be required to explain these expenditures to the National Assembly’s Public Accounts Committees and face potential sanctions for these alleged irregularities.

Context:

• These findings come at a time when the Nigerian government is facing significant revenue shortfalls, with actual revenue falling significantly below projected figures.
• The NNPCL has been a subject of controversy in recent years, with concerns raised about its financial transparency and accountability.