Dividends of controversy

DGossip247 writes on the bickering between the ruling All Progressives Congress (APC) and the Peoples Democratic Party (PDP) over the source of the $2.1billion shared among the three tiers of government

The governing All Progressives Congress (APC) and the opposition Peoples Democratic Party (PDP) have been engaged in a war of words over the recent sharing of a special fund among the three tiers of government. While the PDP insists that the shared fund came from savings left behind by former President Goodluck Jonathan’s administration in the Excess Crude Account (ECA), the Presidency said the shared fund was proceeds of the dividends paid by the Nigerian Liquefied Natural Gas (NLNG) to the Federation Account. Prior to the swearing-in of President Muhammadu Buhari on May 29, many states owed backlog of unpaid workers’ salaries, just as many projects are already abandoned over paucity of funds. As at that time, no fewer than 15 of the 36 states of the federation owed workers’ salaries.

With this reality on ground, what seemed to be the priority of the Buhari’s administration immediately he assumed office was to rescue the ‘troubled states.’ But upon assumption of office, the hope of the governors appeared shattered following Buhari’s disclosure that the PDP government left an empty treasury. While the argument over ‘empty treasury’ and ‘bailout’ for states lingered, President Buhari and the 36 states governors met in Abuja on June 23 to brainstorm on how to ‘rescue the troubled states’. The president during the meeting was reported to have assured the governors of a special relief package. And less than two weeks after the meeting, Buhari directed the release of special funds to assuage the plight of thousands of Nigerian workers in the service of federal and state governments.

The disbursement, pegged at about $2.1 billion (N413.7 billion) sourced from the NLNG proceeds to the Federation Account was reported to have been authorised to be shared among the federal, states and local governments. While the disbursement of the special fund elicited much joy in many quarters, the sharing of the NLNG proceeds stirred up controversy between the ruling party and the PDP. The PDP insisted that the shared money was taken from ECA account, while the Presidency claimed that the shared fund was raised from NLNG dividends. The sharing of the NLNG dividends by Buhari’s government also generated accusation and  counter-accusation between the APC and PDP over whereabouts of about $4 billion taxes and dividends paid by the NLNG to Federal Government in the last 10 years. The exchange of words between the two parties was based on the claim by the NLNG Managing Director, Babs Omotowa, that the company had paid over $30 billion to its shareholders in the past 10 years.

PDP lays claim to relief credit

In an attempt to fault President Buhari’s claim that he met an empty treasury when he assumed office, the national leadership of the PDP on July 7 took a swipe at the Presidency, noting that a significant amount of the ‘bailout’ came from savings accumulated in the ECA handed over to incumbent government by the past PDP-led administration. The PDP in a statement by its National Publicity Secretary, Chief Olisa Metuh, claimed that the financial prudence of ex-President Goodluck Jonathan’s administration and his plan to save for the rainy days ensured financial succour for state governors and therefore urged Buhari administration to give credit to the immediate past administration. The party spokesman also demanded an apology from President Buhari over his earlier claim that he met an empty treasury.

“We want to believe that given the President’s release of such huge amount, he may have realised that he was earlier misdirected on the actual financial state of the nation at the time he took over. In this regard, we expect the President, as a respected statesman to do the needful to correct that erroneous impression. “Furthermore, we expect President Buhari’s APC administration as direct beneficiary of these savings initiated by past PDP administrations to appreciate the strategic importance of always saving for rainy days and as such guarantee prudent and transparent management of the nation’s resources now under its care,” Metuh stated.

Presidency faults PDP’s claim

In a swift reaction to PDP’s claim, the Presidency in a statement issued by the Special Adviser to the President on Media and Publicity, Mr. Femi Adesina on July 8, described PDP’s claim as ‘banal and ludicrous.’ “Mr. Metuh’s claim that a significant amount of the funds came from savings accumulated in the Excess Crude Account and handed over to the Buhari administration is completely false and deliberately intended to mislead the public. “The funds approved by President Buhari for sharing to the three tiers of government came entirely from dividends and taxes paid to the Federation Account by the NLNG, not from the ECA. “The disbursed NLNG dividends and taxes were paid into the Federation Account in June this year and confirmed by the Central Bank’s statement to the Federal Government on July 7, 2015. The funds cannot, therefore, be considered ‘savings’ by the Jonathan administration which left office in May, 2015, as disingenuously claimed by Mr. Metuh,” he said. Adesina stressed further that President Buhari should be commended for his openness, transparency and accountability, which he brought to the management of national funds.

PDP states’ chairmen kick

In a swift reaction to the claim by the presidency that the disbursement was taken from NLNG and not ECA, the chairmen of state branches of the PDP on July 12 accused President Buhari of not telling the truth on the source of the fund. The PDP state chairmen in a statement by their chairman, Dr. Emmanuel Agbo (Benue State), said: “The media adviser to President Buhari is economical with the truth. By denying release of funds from the ECA, he is being economical with the facts regarding the bailout by Mr. President. “There is no way that only $2 billion from LNGN will equal N804 billion released for sharing by the three tiers of government. The bank loan arrangements are not physical cash on the table for direct disbursements to the tiers of government. Therefore, the media adviser’s claim of the ECA being intact is misleading and deliberate distortion of facts.”

Bickering over NLNG payments

The exchange of words between APC and the PDP got more intense and took another dimension few days ago following the revelation by the NLNG Managing Director, Omotowa, that the company had paid over $30 billion to its shareholders in the past 10 years. Based on Omotowa’s revelation on NLNG dividends, APC asked President Buhari to probe ex-President Jonathan’s administration over $5.5 billion dividends said to have been paid to the Federal Government by the NLNG Company. The party in a statement by its National Publicity Secretary, Alhaji Lai Mohammed, also called on the Federal Government to urgently unravel what happened to the past Company Income Tax/ Education tax as well as dividends paid to the Nigerian government by the NLNG, against the background of published reports that the funds were never paid into the Federation Account as they should have been. “We can tell Nigerians that apart from the said $1.6 billionn NLNG payment for 2015, NLNG

also paid $1.4 billion as Income Tax/Education Tax in May 2014, paid $0.3 billion as Education Tax to the Federal Government in 2011, 2012 and 2013 and $1.2 billion in VAT and Withholding Tax to the Federal Government since 2009. These payments are just those made in the past six years alone, hence there were other payments before then. “In addition, dividend payments totalling $4,728,136,946 was paid to the Federal Government between 2004 and 2009, out of which only $127,851,348.19 was credited to the Federal Government’s account with JP Morgan, leaving a balance of over $4 billion

. The questions to ask, therefore, are why were all the past taxes and dividends neither fully paid into the Federation Account nor shared by the three tiers of government and what happened to the funds? “We didn’t see the $5.5bn in the system. Let them show Nigerians where it is,” APC stated. But the PDP in a statement signed by Metuh described APC statement as “misleading and outright falsehood,” claiming that its government saved the money for reinvestment. “The truth is that the NLNG had been on a 10- year tax haven until 2014. Within this period, successive governments, right from President Olusegun Obasanjo never shared nor tampered with the cumulative dividends. Whatever taxes paid from the NLNG go through the Federal Inland Revenue Services (FIRS) and recorded as part of the income of the Federal Government. “It is imperative to note that by the end of the tenure of President Goodluck Jonathan, NLNG dividends had risen to a cumulative $5.6 billion and not a single cent was ever taken from the funds.”

NNPC withdraws $1.2bn from banks

In a move that seem to be related to the alleged missing NLNG dividends, New Telegraph had exclusively reported that the Nigerian National Petroleum Corporation (NNPC) withdrew $1.2 billion (N240 billion) from banks, triggering more dollar liquidity squeeze in the money market and causing the value of the naira to depreciate further at the parallel market. New Telegraph gathered that NNPC wrote the lenders three weeks ago, intimating them of its intention to transfer its domiciliary accounts to the CBN.

A top NNPC official, who pleaded anonymity, confirmed the withdrawal to New Telegraph, saying that the decision to move the accounts to the CBN stemmed from the ongoing probe of the corporation, adding that the move was to harmonise all “their accounts.” APC kicks over withdrawal of $1.2bn Penultimate Thursday, the ruling APC renewed its call on the Federal Government to probe the whereabouts of the dividends paid to the NNPC by the NLNG, as well as the taxes paid to the FIRS Federation Account prior to the latest payment in June 2015. The party in a statement signed by Mohammed, said the fresh call for the probe has become more urgent against the backdrop of published reports that the NNPC has withdrawn $1.2 billion from banks so it could place the money with the CBN. APC said the move by the oil corporation is a panic reaction to the expose by the party that over $4 billion are missing in past dividends paid to the NNPC by the NLNG. The party said any delay in calling the officials to account for the dividends may give them enough time to cover their tracks, in addition to the dangers posed to the banks – and by extension the economy – by the sudden withdrawal of such a huge fund from the NNPC accounts with them.

“Whereas NLNG’s dividends are paid to NNPC’s account with JP Morgan, from where they are supposed to be paid into the Federation Account in accordance with the law, some unscrupulous officials of the corporation have apparently been moving such funds to local banks so they can collect huge commissions on them. “Now that the cat has been let out of the bag, they have started moving the funds from the banks to the CBN. We believe what we are seeing now is just a tip of the iceberg, hence the need for the authorities to call the NNPC officials to give accounts of the paid NLNG dividends to date. “The top officials of the NNPC and others who met on Monday and decided to withdraw the $1.2 billion from the corporation’s account to the CBN must be asked a number of questions, including their motive for the decision and the whereabouts of the commissions paid on such funds,” it said. APC also insisted that despite the attempt to pull the wool over the eyes of Nigerians, the Federal Government must remain undaunted in unravelling what happened to the dividends as well as previous taxes paid by the NLNG, as part of ongoing efforts to plug all financial leakages, ensure the payment into the Federation Account of all relevant funds and stop the looting of the treasury by unscrupulous public officials who have opted to abuse their offices.