The House of Representatives yesterday mandated its Public Accounts Committee (PAC) to investigate the report of the Auditor General of the Federation (AuGF) on the multibillion naira accounting and financial infractions of government and international organisations.
The resolution was consequent upon the adoption of a motion sponsored by Hon. Abdullahi Sa’ad Ibrahim at the plenary. This is coming just as the lawmakers are also set to audit repairs of the Port Harcourt refinery for $1.5 billion as being proposed by the Federal Government. In his lead debate on the motion, the lawmaker recalled that the Auditor General of the Federation had raised several queries on the Federation Account, particularly covering 2015 to 2017 as regards losses of income due to leakages, financial misapplication, misappropriation, underreporting and falsification by Ministries Departments and Agencies (MDAs) and other organisations.
He informed that the queries were corroborated by the forensic audit report by KPMG that indicted some Federal Government agencies for losses of up to N526 billion and $21 billion. According to him, the alleged losses were occasioned by interplay of activities of persons both in the public and private sectors of the Nigerian economy.
He said the organisations involved included multinational and indigenous companies as well as MDAs that continuously exploit Nigeria’s economy through the deployment of deceitful and irregular accounting practices that is resulting in huge capital flight, deficit balances and a weakened economy. Ibrahim noted that “Sections 88 & 89 of the Constitution of the Federal Republic of Nigeria, 1999 (as amended) conferred on the legislature power to investigate with the aim of exposing corruption, inefficiency and blocking waste in the administration of public funds.
“If urgent steps are not taken to address those hydra-headed issues, they may lead to a total collapse of the economy with its attendant social and political crisis,” he said. The motion was unanimously adopted. Meanwhile, the house has also mandated its Committee on Petroleum Resources (Downstream) to carry out an investigative hearing and conduct a comprehensive audit of funds previously spent on the rehabilitation/repairs and maintenance of the Port-Harcourt Refinery and other refineries in the country.
The committee will also examine the performance bond, assurance, warrantees and guarantees put in place for operating and maintaining the plants after commissioning and report to the House for further legislative action, within six weeks. The resolutions were taken following the adoption of a motion sponsored by Hon. Onofiok Luke (PDP, Akwa Ibom) at yesterday’s plenary.
n approving the motion, the House also urged the Federal Government to grant licence and provide incentives for the building and construction of modular refineries. Leading debate on the motion, Onofiok recalled the recent news of the approval of the sum of $1.5 billion, about N575 billion, for immediate commencement of rehabilitation work on the 32-year-old Port Harcourt Refinery phased at an estimated completion period of 44 months (approximately 4 Years) with a three components funding from Nigerian National Petroleum Corporation (NNPC), internally generated revenue (IGR), budgetary allocations provisions, and Afreximbank.
He expressed concerns that NNPC had spent about $25 billion in maintenance of refineries in the past 25 years, saying “this latest prevailing development is coming after promises by the current administration that government would no longer spend on the facility.” He said previous rehabilitations notwithstanding, NNPC audit report had, last year, revealed that three of the nation’s four refineries recorded N1.64 trillion cumulative losses in their 2014 to 2018 details. “Despite processing no crude oil in June last year, the three refineries still cost the country N10.23 billion in expenses.
The three refineries processed no crude because of the rehabilitation works being carried out on them, therefore, there was no associated crude plus freight cost for the three refineries since there was no production, but operational expenses that amounted to N10.27 billion. This resulted in an operating deficit of N10.23 billion by the refineries.” “Concerned that just in July 2017 major structural construction began on Dangote’s 650,000 bpd refineries with partial refining capability likely in 2022. The same lag period that rehabilitation would be carried out on the 210,000 bpd Port Harcourt Refineries.”