THE signs have been ominous: The Revenue Mobilisation, Allocation and Fiscal Mobilisation (RMAFC) last month failed to disburse allocations to the three tiers of government as scheduled.
In a startling disclosure last week, the Minister of Finance, Dr. Ngozi Okonjo-Iweala, stated that the country only had $3.6 billion left in the Excess Crude Account.
Federal workers get paid days into the month and several states across the nation are failing to meet their salary obligations to their workers.
A puzzled nation has been trying to connect the dots in the unfolding scenario. Why is there no fund to share to the three tiers of government? How come the Excess Crude Fund got depleted at the speed of light? Why are the Federal Government and states unable to pay their workers as at when due? What is going on?
Well, The Guardian can authoritatively provide the answer to this puzzle: The nation’s cash cow, the Nigerian National Petroleum Corporation (NNPC), is currently in dire financial straits!
Indeed, impeccable sources informed The Guardian that the NNPC, which usually provides the bulk of funds to the nation’s coffers through revenue from crude oil, is indebted to a consortium of foreign banks to the tune of $3.5 billion.
The NNPC raked up the debt in the course of importing petroleum products and paying out subsidies on them, The Guardian learnt. Of course, a tidy sum also went to waste via inefficiency.
But the NNPC has denied incurring a “hundreds of billions of dollars in debt” as sources had claimed overhang from its balance sheet from some local and international product sales.
Group General Managing, Public Affairs of the Corporation, Dr. Levi Ajuonuma, in a statement, explained that the said $350 billion debt (the figure some people are quoting) was “an erroneous misrepresentation of an outstanding $3.6 billion owed some product suppliers.”
His words: “The business of NNPC is carried out between the Corporation and its suppliers and naturally such transaction usually generate what is known in common accounting parlance as payables and receivables in the books of parties concerned. Currently the books reflect an outstanding $3.6billion to our products suppliers.”
Ajuonuma noted that the figure changes from time to time depending on the volume of new supplies to the corporation and payments made by it on account of same.
“This does not in any way translate to massive indebtedness of $350billion to any bank as being insinuated,” he added.
But foreign banks, according to the sources, are currently breathing down the nation’s neck to pay up. The rumpus generated by the debt crisis has attracted the attention of the Presidency. In fact, on a recent visit abroad, President Goodluck Jonathan, met with representatives of foreign banks and assured that the debt would be paid.
Weighed down by this huge debt, which it is paying off from proceeds of crude oil sales, the NNPC has not been able to remit enough funds into the Federation Accounts for the three tiers of government to share as statutorily required, hence the payment hiccups across the country.
The cash crunch crisis created by this development evidently led the Presidency, buckling under intense pressure from state governors, to open up the Excess Crude Funds to the three tiers of government.
Two years ago, the then Finance Minister, Remi Babalola, had alerted the nation on the rising debt profile at the NNPC, saying the Corporation was at the precipices financially.
The alarm did not go down well with officialdom, and Babalola was quickly moved out of the Finance Ministry, and eventually out of the cabinet.