Plan to remit crude oil sales to CBN illegal – Atiku

Presidential candidate of the Peoples Democratic Party (PDP), Atiku Abubakar, has questioned President Bola Tinubu’s order granting the Central Bank of Nigeria authority over the earnings from the sale of crude oil by the Nigerian National Petroleum Corporation Limited.

He pointed out that the CBN is not the only entity that must enforce the policy.

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.

But in a signed statement, Atiku recommended that the top bank work with the Nigeria Extractive Industry openness Initiative to demonstrate accountability and openness.

The decision, according to the former vice president, is “illegal,” and it compromises the NNPCL’s operational independence.

The CBN Governor, Olayemi Cardoso, said 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.

“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.

WesternPost reported last month how Atiku asked President 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.

Atiku also 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.”

Tinubu wrested control of the NNPCL finances and donated the same to the Federal Ministry of Finance and the Central Bank of Nigeria,” Atiku further bemoaned.

The PDP leader went on to say that the national oil company’s submission of crude oil sales receipts to CBN for verification and documentation was a “unprecedented act, without any legal or ethical basis.”

“A violation of the principle of due process in public administration,” he continued, is what the directive represents.

Atiku maintained that the NNPCL should function independently, much like other state-owned businesses, in accordance with global best practices and accepted corporate governance norms.

He added that the NNPCL is authorised to function as a separate limited liability company in accordance with Sections 53 to 65 of the Petroleum Industry Act 2021.

“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 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.”