AFRICA

Nigerian Lawmakers Investigate NNPC Over $60bn Revenue Loss to Inflated Contracts

The House of Representatives has resolved to launch an investigation into the loss of over $60 billion in revenue due to inflated cash calls by the Nigerian National Petroleum Company Limited (NNPC) Joint Venture agreements.

The decision was sequel to the adoption of a motion moved at plenary on Wednesday by Hon. Chika Okafor.

The House also mandated its Committees on Banking Regulations, Banking and Other Ancillary Institutions to liaise with the Central Bank of Nigeria (CBN) to explore the appropriate mechanisms, policies, and partnerships required for the adoption of the Chinese Yuan (CNY) as an official foreign exchange reserve currency, alongside other major international currencies.

That was after the adoption of a motion on the need to use the Chinese Yuan to mitigate the effect of Naira depreciation, moved at plenary on Wednesday by Hon. Jafaru Leko.

Moving the motion on the investigation of revenue loss to bloated cash calls, Okafor said NNPC, on behalf of the federal government, operated joint ventures and related agreements with private oil companies in both oil and gas sectors, with the aim of sustainable revenue generation and economic development.

He stressed that NNPC, as the representative of the federal government and the federation, had about 60 per cent holdings, while other partners had the remaining 40 per cent.

Okafor added that the joint ventures operated under a “Joint Operating Agreement” that spelt out the responsibilities of each of the partners in the ventures.

He stated, “Concerned that due to bloated Cash Call Costs, the NNPC Upstream Investment Management Services (NUIMS), a unit under the NNPCL in charge of negotiation of costs (both Capex and Opex), have caused huge losses in the neighborhood of ($60,000,000,000) Sixty Billion Dollars over the years.”

The lawmaker expressed worry that the activities of NNPC Upstream Investment Management Services (NUIMS) had resulted in huge revenue losses, fiscal deficits, and an alarming debt profile.

The House, therefore, mandated “the Committees on Finance and Petroleum Resources (Upstream) to conduct a comprehensive investigation on all the NNPCL Joint Venture Operations to determine income and Cash Call costs due to each partner, especially the Federation/FGN, and whether due process and diligence were observed in the exercise.”

Leko, while presenting the motion on the adoption of the Chinese Yuan, said the Nigerian economy had experienced substantial shifts regarding the value of the naira, triggering economic instability and uncertainty.

He said the International Monetary Fund (IMF) proposed diversification of foreign exchange reserves for central banks of developing countries, including Nigeria.

The lawmaker pointed out that the global economic landscape was evolving and international trade dynamics were shifting, with China assuming a leading role in global trade.

Leko stressed that the People’s Republic of China had a stable and globally recognised currency, CNY, which was gaining recognition in international trade. He emphasised that adopting the Chinese Yuan as an additional foreign exchange reserve currency might mitigate the adverse effects of naira depreciation, reduce the risks associated with exchange rate fluctuations, and enhance Nigeria’s economic stability.

The lawmaker said the move would enhance Nigeria’s trade and economic ties with China, a crucial trading partner.

The House mandated, “The Committees on Banking Regulations, Banking and Other Ancillary Institutions to liaise with the Central Bank of Nigeria to explore the appropriate mechanisms, policies, and partnerships required for the adoption of the CNY as an official foreign exchange reserve currency, alongside other major international currencies, and report back within four weeks for further legislative action.”

Adedayo Akinwale

Follow us on:

AriseNews

Recent Posts

Nigeria Announces Public Holidays for Christmas and New Year Celebrations

Federal Government of Nigeria has declared public holidays to mark Christmas and New Year festivities…

4 minutes ago

IGP Orders Investigation into Death of Ilorin Detainee Jimoh Abdulquadri in Police Custody

IGP Egbetokun has ordered an investigation into Jimoh Abdulquadri’s death in police custody, promising justice…

3 hours ago

Trump Dismisses Claims That Elon Musk Holds Real Power Behind US President-Elect

Donald Trump has rejected suggestions that Elon Musk is the true influence behind the newly…

3 hours ago

Tiger Woods’ 15-Year-Old Son Charlie Achieves His First Hole-in-One

Tiger Woods' son Charlie has achieved his first golf hole-in-one during the final round of…

3 hours ago

New Zealand Rejects Cook Islands’ Bid For A Separate Passport

New Zealand has rejected the Cook Islands’ proposal for a separate passport, requiring full independence…

4 hours ago

Honda, Nissan Eye Major Merger, Aim to Finalise Deal by 2025

Honda and Nissan plan a merger to create the world’s third-largest automaker, aiming to finalise…

4 hours ago