CBN lacks power to receive NNPCL crude sales

Former Vice President Atiku Abubakar has criticised President Bola Tinubu’s directive to allow the Central Bank of Nigeria to control crude oil sales proceeds from the Nigerian National Petroleum Corporation Limited.

He noted that the CBN lacks the sole responsibility to see to the directive.

Tinubu had, on Monday, directed the CBN to assume the responsibility for crude oil sales from NNPCL.

Consequently, the oil corporation will submit receipts for crude oil sales to CBN for vetting and documentation.

However, Atiku suggested that the apex bank collaborates with the Nigeria Extractive Industry Transparency Initiative, to reflect transparency and accountability.

As contained in a statement signed by Atiku on Thursday and obtained by PUNCH Online, the former VP who was in office for eight years from 1999-2007, however, described the directive as “illegal,” adding that it undermines the operational independence of the NNPCL.

“Let it also be stated that the Central Bank Act 2007 does not confer on the Central Bank of Nigeria, any responsibility for vetting the transactions of, or formulating and maintaining the internal controls and internal audits in state-owned enterprises, public or private.

“The CBN should be allowed to perform its core functions as provided in the extant law,” he said.

In late January 2024, Atiku had asked Tinubu to account for the NNPCL’s $3.3 billion emergency crude repayment loan which was secured by the corporation on August 16, 2023.

The $3.3 billion emergency crude repayment loan was a transaction aimed at supporting the naira and stabilising the foreign exchange market.

“Without prejudice to the possibility of any good that was intended in the decision of the Federal Government to make the Central Bank of Nigeria (CBN) take over the responsibility for crude oil sales proceeds from the Nigerian National Petroleum Company Limited (NNPCL), it must be clearly stated that the action is not legal in its application,” Atiku stated.

While he lamented the “usual” act of the Tinubu-led administration on its ability to provide enough details on the directive, Atiku, neglecting any good that may result from the directive, said that the “presidential directive is a violation of the legal status of the NNPCL.

“It is an arbitrary order capable of undermining the operational independence of the NNPCL.”

Atiku, a presidential aspirant of the Peoples Democratic Party in the 2023 general elections, lamented that Tinubu had “wrested control of the finances of the NNPCL and donated the same to the Federal Ministry of Finance and the Central Bank of Nigeria.”

Moreover, the CBN Governor, Olayemi Cardoso, disclosed during his keynote speech at the launching of the Nigerian Economic Summit Group macroeconomic outlook report for 2024, that the NNPCL and the Ministry of Finance had agreed to remit all their dollar revenues to the CBN.

Cardoso noted that the move was intended to boost the nation’s External Reserves and foreign exchange flows into the country.

Further in his statement, the PDP chieftain stated that it was an “unprecedented act, without any legal or ethical basis” for the national oil company to submit receipts for crude oil sales to CBN for vetting and documentation.

He added that the directive is a “violation of the principle of due process in public administration,”

Atiku argued that under international best practices and standard principles of corporate governance, the NNPCL ought to operate independently, like other state-owned enterprises.

He also stated that the established Petroleum Industry Act 2021 empowers the NNPCL to operate as an independent limited liability company according to Sections 53 to 65 of the Act.

“State-owned enterprises are not subject to such arbitrary orders and have full control over their finances within the confines of their respective establishment laws.

“The NNPCL is a creation of the Petroleum Industry Act 2021 (PIA), which was signed into law by the President of the Federal Republic of Nigeria on 16 August 2021.

“The PIA makes extensive provisions for the formation, structure, governance, and operation of the NNPCL as an independent limited liability company in Sections 53 to 65 of the Act,” the statement read.

Atiku urged the FG to “respect the provisions of the law and allow the NNPCL to run as an independent company based on sound commercial objectives and in line with international best practices and standard principles of corporate governance.”

He noted that with its independence, the national oil company would be able to “grow into a formidable institution with track records, requisite technical and financial capacity, and readiness to operate in public space.

“Any attempt to undermine the operational independence of the NNPCL will be a hindrance to any chances of attracting investments and attaining global relevance in the Petroleum Industry.”

The statement read further, “To enhance transparency and accountability in the operation of the NNPCL, its bank accounts for crude sales proceeds (for example at Morgan Stanley) and the entire crude sales conversion circle can be trailed by Nigeria Extractive Industry Transparency Initiative (NEITI) and CBN.

“Amongst other supportive measures to enhance transparency, the NNPCL board members can be better selected and reconstituted to include, if desired, representatives of the CBN and NEITI.”