- As NNPC’s cash call debts hit $7b
A Federal High Court in Lagos has ordered a former Minister of Finance, Dr. Ngozi Okonjo-Iweala, to account for the N30tn which a former Governor of the Central Bank of Nigeria, Prof. Charles Soludo, claimed went missing under her watch.
Justice Ibrahim Buba said ordering Okonjo-Iweala to offer explanation on the allegedly missing money was the only thing to do since she had failed to put in a valid defence against a suit seeking an order, mandating her to account for the allegedly missing money.
Soludo had, sometime ago, alleged that “at least, N30tn was either stolen or unaccounted for, or grossly mismanaged” over the years that Okonjo-Iweala was in office as the Coordinating Minister of the Economy and Minister of Finance.
Following the allegation, a group, Socio-Economic Rights and Accountability Project, had demanded an explanation from Okonjo-Iweala under the Freedom of Information Act and later filed a suit before Justice Buba after the ex-minister did not oblige its request.
The Federal Government was joined as a respondent in the suit.
SERAP said in a statement on Sunday by its Executive Director, Adetokunbo Mumuni, that Justice Buba delivered judgment in the suit last week, holding that Okonjo-Iweala had no legal justification to ignore the request to account for the allegedly missing N30tn.
It quoted the judge as saying, “The court has gone through the application and agrees that SERAP’s application has merit and the argument is not opposed. SERAP’s application is granted as prayed.”
The judge upheld the plaintiff’s argument that Okonjo-Iweala “should have either supplied the information requested by SERAP or communicate her denial within seven days of the receipt of the letter from SERAP if she considers that the request should be denied.”
The court held that the preliminary objection filled by the defendants, challenging, among other things, the jurisdiction of the court to hear the suit, was misconceived.
Justice Buba held, “The only issue for determination is whether Mrs. Okonjo-Iweala and the Federal Government should be heard on their preliminary objection considering the totality of the circumstances of this case.
“He who wants equity must do equity. This suit was filed on February 25, 2015 and from the record of the court was served on Mrs. Okonjo-Iweala and the Federal Government on July 3, 2015. It took about three months for them to come up with a technical response to the simple request for information under the Freedom of Information Act 2011.
“Mrs. Okonjo-Iweala and the Federal Government have therefore been caught by Order 29 of the Rules of this court, which requires that an application shall be made within 21 days after service on the defendants of the originating summons.
“If Mrs. Okonjo-Iweala and the Federal Government want to raise issues about service, the law does not permit demurer. The proper route for them should have been to join issues with the originating summons and also file their objections.
“In the present case by SERAP, the notice of preliminary objection by Mrs. Okonjo-Iweala and the Federal Government is incurably defective for not conforming with order 29 of the rules of this court.
“The implication of this clear provision of the rule of court is that Mrs. Okonjo-Iweala and the Federal Government must take issues with SERAP on the originating summons no matter how flimsy, instead of looking for a technical way out. This technical way out has failed.”
Meanwhile, Nigerian National Petroleum Corporation’s (NNPC’s ) debt overhang in cash calls to multinational and indigenous oil companies it operates Joint Venture (JV) project with, has reached about $7billion, it was learnt at the weekend.
Cash calls is the counterpart funding the NNPC pays yearly for the 60 per cent equity shareholding it owns in various oil and gas fields operated by International Oil Companies (IOCs) and indigenous oil firms (independents).
The Corporation has over the years been battling to clear the cash call arrears, which have been revolving around $5 billion. The Federal Government is determined to settle the arrears to the operators of the various JVs the Minister of State for Petroleum Resources and NNPC Group Managing Director, Dr Ibe Kachikwu, has said.
However, it is feared that the prevailing low oil price regime, which has reduced the nation’s revenue from oil, may prevent the government from accomplishing its desire to settle the $7billion debt .
It was learnt that as at January this year, NNPC owed the IOCs cash call arrears of $5.5 billion, while their indigenous counterparts are being owed $1.1 billion, and an estimated $400 million that would have accrued between January and now.
The Federal Government said it is considering the adoption of zero funding model for the JV operations from next year to halt the growth of the cash call arrears but there are still concerns about the model.
The zero JV funding seeks to empower the operators not to wait for the NNPC counterpart funding before going on with operations and projects implementation. Therefore, the operators will source funds and go ahead with projects’ implementations, while the NNPC’s bureaucratic processes of approval including endorsement by the National Assembly continue. The operators of the JVs will deduct costs at the end and remit what is due to NNPC at the end of the deal.
An industry source told The Nation that the zero funding model being contemplated by the state-run oil firm will cost it more as the operators will source funding from banks, and interests paid on such loans secured by the oil firms will be factored into the cost of production.
The source said if the government lacks capacity to pay its cash calls, let it choose from some alternative options including divesting some of its equity holdings to indigenous firms, adopt crude for cash calls or privatise the NNPC. According to the source, NNPC has only been able to meet only 30 per cent of the 60 per cent cash call it is supposed to pay. “As long as the funding issues exist, production will adversely be impacted,” the source said, warning that JV oil production has since dropped to one million barrels per day (bpd) as against about 2.5 million bpd in the past due to JV budget delay.
Punch with additional report form Nation
