Missing $20 Billion: SERAP Faults Adoke On NNPC Remittance

The Socio-Economic Rights and Accountability Project, SERAP, a non-governmental organisation, has faulted the attorney-general of the federation and minister of Justice, Mohammed Adoke’s assertion during a senate hearing last week that the Nigerian National Petroleum Corporation, was empowered by the NNPC Act to remit to the federation account, only its net earnings after deducting cost of its operations.

According to a statement signed by its executive director, Adetokunbo Mumuni, on Monday, SERAP believes that arguing that the NNPC has no responsibility to remit all public revenue amounts to permitting the corporation to create something parallel to a ‘special fund’ and recalled that the Supreme Court in the case of the attorney-general of the federation versus attorney –general of Abia State in 2002, ruled that the provisions of Section 1 (d) of the Allocation of Revenue (Federation Accounts etc.) Act on “Special Funds” is inconsistent with the provisions of Section 162 (3) of the 1999 Constitution and therefore unconstitutional.”

Section 162 (1) of the Constitution states: “The Federation shall maintain a special account to be called “the Federation Account” into which shall be paid all revenues collected by the Government of the Federation, except the proceeds from the personal income tax of the personnel of the armed forces of the Federation, the Nigeria Police Force, the Ministry or department of government charged with responsibility for Foreign Affairs and the residents of the Federal Capital Territory, Abuja.”

Adoke had said to the Senate: “It is my considered view that the provision of Section 162 which requires all revenue to be remitted to the Federation Account does not preclude the deduction of NNPC’S expenditure or cost of business. This is more so as the federating units do not contribute to the funding of upstream petroleum operations of the NNPC and its subsidiary.”

However, SERAP noted that the use of the words ‘all public revenue’ suggests that the constitution allows of no distinction between net revenue and gross revenue.

It further argued that the NNPC Act relied upon by Adoke cannot override the clear provisions of Section 162, and the sacred principle that the Constitution is the supreme law of the land,” the organisation also said.

“Being the supreme law of the land, the constitution is not a document to be read with levity or disdain; every section must be given its meaning…It has to be emphasized that Section 162 does not exempt certain types of revenue and does not distinguish between ‘net and gross revenue’ as Mr Adoke has attempted to do,” Mumuni maintained.

Section 162(10) of the Constitution further clarifies the matter when it defined “Revenue” to mean “income or return accruing to or derived by the government of the Federation from any source and includes” : a) any receipt, however described, arising from the operation of any law; b) any return, however described, arising from or in respect of any property held by the Government of the Federation; c) any return by way of interest on loans and dividends in respect of shares or interest held by the Government of the Federation in any company or statutory body.”



    “Assuming for the sake of argument that the NNPC is required to pay into the Federation Accounts only the ‘net revenue’ and not the ‘gross revenue’ as Mr Adoke has argued, this will still not remove the fact that the NNPC is a trustee of the public revenue collected. Therefore, as a trustee, the NNPC has a legal duty to render account to the beneficiaries (Nigerians) of the trust, if and when called upon to do so,” SERAP stressed.

    It noted that the NNPC has woefully failed to discharge the sacred responsibility, adding that the impression now created by Adoke’s legal advice is clearly inconsistent with the attitude of a government that has repeatedly expressed commitment to fight corruption, and in fact signed the Freedom of Information Act.

    “This interpretation is entirely consistent with Section 162 (2) of the Constitution which provides that the President, upon the receipt of advice from the Revenue Mobilisation, Allocation and Fiscal Commission, shall table before the National Assembly proposals for revenue allocation from the Federation Account and in determining the formula, the National Assembly shall take into account, the allocation principles,” the organization added.

    It therefore urged the attorney-general of the federation to urgently refer the NNPC to appropriate anti-corruption agencies so that the confusion around the missing $20 billion oil money is resolved once and for all, and suspected perpetrators brought to justice.

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