Presidency Clears The Air On $25bn NNPC Contracts

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About a week and four days after it was reported on social and traditional media that the Nigerian National Petroleum Corporation (NNPC) awarded $25 billion worth of oil contracts without due process, the presidency on Sunday made certain clarifications on the allegation.

Senior special assistant to the vice president on media and publicity, Mr. Laolu Akande, who stated the presidency’s position on the matter said no contracts were procured by the NNPC as contained in the leaked memo of the Minister of State for Petroleum Resources, Dr Ibe Kachikwu.

Responding to media inquiries yesterday on the matter, Akande said even though such impressions have been maliciously created in the past few weeks, a closer look at each of the said projects indicate clearly that “these are not procurement contracts”.

He said, “When I tweeted on Thursday morning last week, I had indicated that the Vice President, while acting as President approved Joint Venture Financing arrangements.

“But for some curious reasons, a few media reports used that tweet to report that I said the then Acting President approved N640 Billion worth of oil contracts. Such reporting is both false and misleading and therefore ought to be completely ignored by all seekers of truth”.

What is more important, Akande submitted, is that “when you look diligently at the referenced projects/transactions one by one, you will see, as NNPC has shown, that none of them was actually a procurement contract”.

Explaining the mix up in details, he said, “Take both the Crude Term Contract and the Direct Sale, Direct Purchase (DSDP) agreements for instance, these are not procurement contracts involving the expenditure of public funds. Both transactions are simply a shortlisting process, in which prospective off-takers of crude oil and suppliers of petroleum are selected under agreed terms, and in accordance with due process.

“It is therefore wrong and misleading to refer to them as though they’re contracts involving the expenditure of NNPC funds, or public funds of any sort. As you now know, the Honorable Minister of Petroleum Resources himself has in fact clarified that he meant to focus on administrative and governance issues, not red-flag any fraud – because no fraud exists in this matter”.

For both transactions, Akande said it is not true and also inaccurate to attach $10 billion and $5 biilion values on them, as “attaching monetary values to these contracts is an arbitrary act that completely distorts understanding of the situation”.

He said Nigerians ought to be informed clearly that “whenever there is a monetary value on any consignment of crude oil lifted in this country by any firm, the proceeds go directly to the Federation Account and not to any company.

“In fact, the Buhari administration in the implementation of the TSA has closed down multiple NNPC accounts in order to promote transparency and probity”, he stated.

Akande continued: “Even in compiling the shortlisting for the prospective off-takers of crude oil and suppliers of petroleum under agreed terms, “there were public placements of advert in the mass media seeking Expressions of Interest (EoI). Bids were publicly opened in the presence of NEITI, DPR, BPP, Civil Society groups and the press. In some cases even, these events were televised live.

“For the sake of emphasis let me state clearly that both the Crude Term Contract and the Direct Sale and Direct Purchase agreements are not contracts for any procurement of goods, works or services, and therefore do not involve the use of public funds.

“Instead, they are simply a shortlisting of off-takers. And unlike what has been reported in the media so far, it is important to set the records straight that the list of approved off-takers does not carry any financial values but simply states the terms and conditions for the lifting and supply of petroleum products”.

He also disclosed that the Ajaokuta-Kaduna-Kano (AKK) Gas Pipeline Contract “is a contractor-financed contract which has not yet been finalized or awarded”, as “it is still making its way to the Federal Executive Council (FEC).

“There were also three presidential approvals given on Joint Venture financing arrangements, meaning loans to cater for cash call obligations. One of these was okayed by the President in 2015, and two by the then Acting President in 2017”, Akande noted.

Lastly, on the NPDC, he said there is no contract in the $3BN to $4BN range as reported in the media. “You can then see from the foregoing that the $25BN being bandied in the media does not exist. There is no $25BN missing”, Akande concluded.

…Denies State House Clinic Got N11bn In 3 Years

The presidency yesterday dismissed reports that the State House clinic received N11.1 billion as appropriation for the period 2015-2017.

This is coming on the heels of the resolve by the House of Representatives committee on Healthcare Services to investigate the deplorable condition of the State House Clinic and alleged deductions from the salaries and allowances of its medical staff.

According to Hon, Henry Archibong (Akwa Ibom-PDP) who moved the motion, the clinic had, over the years, been receiving annual budgetary allocations to procure equipment that will enable it function optimally.

He said in the 2015, 2016 and 2017 Appropriation Acts, the clinic was allocated the sums of N3.94 billion, N3.87 billion and N3.2 billion respectively for upgrading and provision of necessary drugs and equipment.

But responding to the allegations, deputy director of Information in the office of the special adviser to the president on media and puclicity, Attah Esa, noted in a statement that the clinic only received 33% of its capital allocation in the period under review.

He said, “The attention of the presidency has been drawn to recent media reports suggesting that the State House Medical Centre had received N11.01billion as appropriation for the period 2015-2017.

“According to the Permanent Secretary, State House, Jalal A. Arabi, contrary to the above claims, out of the total Capital Appropriation of N2,941,062,044.00 and Recurrent Appropriation of N465,935,358.00 for the period under reference, only the sum of N969,681,821.53 (representing 32.97%) for Capital and N225,575,200.60 (representing 48.41%) for Recurrent was actually released.

“Arabi also said it may interest the public to know that there was zero capital allocation for the Medical Centre in 2017, while out of the N331,730,211.00 being recurrent appropriation for 2017, the actual amount released up to September was N91,370,053.60 (representing only 27.54%)”.

Esa said the permanent secretary emphasised that the above figures were verifiable from the ministries of Finance, Budget and National Planning.

The deputy director continued: “He (perm sec) observed that during the three-year period under review (indeed two years since no capital allocation for 2017), and despite the shortfalls between budgetary provisions and actual releases, the Medical Centre continued to provide free services to the over 10,000 registered patients annually. In addition, the Centre has continued to execute on-going projects.

“Giving further insight into the scope of the Medical Centre’s clientele, Arabi stressed that apart from the Presidency, other beneficiaries of the free services include political appointees, the military, para-military, other security agencies, members of the National Assembly, and the general public”.

Esa quoted permanent secretary as saying: “Considering the unrestricted patronage base and free services of the State House Medical Centre, coupled with the funding hiccups and periodic receipts, it may not be far-fetched to notice gaps between demand and supply of medical equipment and consumables at certain stages of the budget circle”.

Last week wife of the president, Hajiya Aisha Buhari, took a swipe at the management of State House Medical Centre (SHMC), describing them as a bunch with misplaced priorities.

According to President Buhari’s wife, it was ironical that the hospital management would be embarking on massive construction and renovations of buildings while the cheapest of drugs could not be provided even as equipment were dysfunctional.

Some days before Aisha Buhari’s comments, one of the preisdent’s daughter, Zahra, had, on her Instagram page, raised a question on what had been happening to the huge budgetary allocation to the hospital.

 

APC To PDP: We Are Not Borrowing For Salaries, Bogus Projects

Meanwhile, the All Progressives Congress (APC) yesterday urged the Peoples Democratic Party (PDP) to wake up to new realities that the days of borrowing to pay salaries and fund bogus projects are long gone.

The PDP had in a recent statement carpeted the APC on the plan by the President Muhammadu Buhari administration to obtain a $5.5 billion foreign loan.

But in a statement signed by the party’s national publicity secretary, Bolaji Abdullahi, APC chronicled series of such steps, which were taken by the PDP, while it was in government at the center.

The party also asserted that “today, successive national budgets of the APC administration has prioritised and increased budgetary allocation for capital projects as one of the strategic ways to stimulate economic growth in the country”.

The statement reads in part: “In developing economies, governments typically resort to borrowing to finance economic development projects because taxation and other revenue streams may not necessarily provide sufficient funds for economic development.

“The recent borrowing plans proposed by the President Buhari administration is no different as the President has clearly stated in his request to the National Assembly that the loan will be used to finance the 2017 budget deficit and invest in critical and verifiable infrastructure project which will ultimately grow the economy.

“The PDP in its statement unapologetically claimed that it meritoriously governed the country for 16 years and handed over a buoyant economy to the APC in 2015. Really, what could be further from the truth? The APC considers the claim a new height of PDP’s insensitivity to the populace and has further exposed the PDP as a Party unrepentant for the rot it left the country after its 16 years rule”.

Bashing PDP the more, the APC said even when crude sold above $100, the immediate-past PDP-led administration struggled to build savings, in addition to the fact that the excess crude account was misspent.

Abdullahi continued: “Poor capital expenditure meant badly needed infrastructure development was put on hold. This forced construction companies with government contracts to cut back and sack thousands of workers.

“Nigerians will sadly recall how in the lead up to President Buhari’s assumption of office, former finance minister and coordinating minister of the economy, Dr. Ngozi Okonjo-Iweala in May 2015, revealed that Nigeria was borrowing to pay government salaries.

“Out of the N882 billion budgetary provision for borrowing, the government has borrowed 473 billion naira to meet up with recurrent expenditure, including salaries and overheads’, she said”.

The statement made available to LEADERSHIP further noted: “The borrowing plan of the President Buhari-led administration is inevitable in view of the current economic realities in the country.

“As stated in the president’s loan request to the National Assembly, the loan will be invested in infrastructure projects such as the Mambilla Hydropower Project, Construction of a Second Runway at the Nnamdi Azikiwe International Airport, counterpart funding for Rail projects and the construction of the Bodo-Bonny Road, with a Bridge across the Opobo Channel.

“If the PDP thinks that by spewing falsehood and unsubstantiated claims, the Party will return to power in 2019, then the PDP needs to seriously rethink its strategies. Nigerians are not gullible and can differentiate between a Party who brought the country to where it is today and the Party clearing the rot and rebuilding the country.

 

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