Africa, Energy, News, Oil

Nigeria’s State-Run Oil Company Fails to Pay $16Bn to Government

The Nigerian state-run company, the Nigerian National Petroleum Corporation (NNPC), has not paid its $16-billion due payment to the government in a suspected fraud. The company did not provide any official statement or explanation of why the funds are missing. President Muhammadu Buhari has pledged to fight corruption since he came to office last May as the officials from the previous cabinet had been allegedly involved in wholesale corruption scandals in which billions of dollars had simply vanished. Lamido Sanusi, then Central Bank Governor, pointed out to the missing money and was subsequently “fired” from his position.
The Nigerian oil industry is the biggest one on the African continent and accounts for about 14 percent of the country’s economy. Although the petroleum sector is rather a small part of the overall diversified economy, it generates most revenue. The Nigerian government depends on the country’s oil industry for two thirds of its budget. As such, the money from the sector should be used to build infrastructure and to invest in social and welfare services. Instead, it has been source of rampant corruption for years.
Last month, the current cabinet announced that the NNPC would be dismantled into seven different companies. A separate audit that was ordered by previous President Goodluck Jonathan and conducted by the global accountancy firm PwC found that the state-owned company failed to pay the government $1.48bn between January 2012 and July 2013. The auditing firm did not provide more details on the total amount that the NNPC was due to legally hand over to the government. However, PwC said that it could not vouch for the integrity of the information it was provided when it conducted the audit.

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