Nigeria’s Missing Billions- CBN Fails to Deny nor Confirm Letter by Governor


The attention of the Central  Bank of Nigeria  has been drawn  to an emerging public  discourse  around  a letter purportedly written by the  Governor  to   His  Excellency   the   President   of  the   Federal Republic     of    Nigeria,   Dr.    Goodluck    Ebele   Jonathan,    GCFR, expressing concerns  over non-remittance of oil revenues  by the Nigerian National  Petroleum Corporation (NNPC).

The  Central   Bank  of  Nigeria   will  neither confirm nor  deny  the existence of  such  a letter and  considers  any  discussion  by  it on the alleged  letter to be inappropriate.

However, to the extent that  the matter is gathering momentum in the public space, and seems to be assuming a highly  politicized dimension, the Bank wishes to issue the following clarifications:

1.    The CBN is statutorily mandated to  establish  price  stability, protect the  external value  of our  national currency, manage  the external reserves  of the  Federation and ensure  the smooth functioning  of  our   financial   system, as  well   as  adviser   to  the President  on economic  matters.

2. The capacity  of the Bank to perform its role effectively is strengthened or undermined by the  extent to  which  the  nation  is able   to   increase   foreign   exchange   earnings  and  savings   from these  earnings, thus  boosting  the Excess Crude  Savings  Account, raising  reserve levels, providing currency  stability and moderating interest rates  with  limited risks to inflation and financial  stability.

3. In the performance of this  role it is natural  for the CBN to be concerned  at the low level of accretion  to reserves and the Excess Crude Account, inspite  of strong  international oil prices, especially as  Nigeria’s   performance  is  compared   with  other   oil  producing economies.

4. The  Central   Bank  of  Nigeria  is  aware  that   this  concern  is shared by   Mr.  President,  the     Federal     Ministry     of    Finance, Ministers, State  Governors, legislators, economists, analysts  and all  stakeholders involved in managing the  economy and discussions on how to  address the    matter are  being  held  at highest  levels of Government.

5. The CBN is aware  that, on the  instruction of the  Honourable Minister   of  Petroleum Resources,  the  audit  firm, PWC has  been directed to audit  the revenues  of the NNPC.

6. The  CBN is  also  aware  of  a proposal  to  set  up  a technical team  made  up of representatives the  Federal Ministry of Finance, the  NNPC and  the  CBN to  examine  the  sources  of  any  revenue leakages  and propose  appropriate fiscal controls.

7. The CBN welcomes  these initiatives and believes  that  they represent a positive contribution to  the  process  of improving the management of  the  economy, especially  if  they  lead  to  greater oversight      of   the    Finance    Ministry    over    oil revenues and improvements in disclosure  and transparency in the Oil Industry.

8. The  Central   Bank   of  Nigeria   recognizes   that   there   is  an urgent need  to  review  fiscal  terms  of  sharing  revenues  between the  Federal Government and oil companies  and to  improve governance and transparency in the official  oil sector.    This underscores the  need  to  urgently pass a Petroleum  Industry Bill (PIB)  that  addresses  fiscal  terms  and the  structure of the  NNPC. We  therefore  support the  effort of  the  Federal  Government to pass a new PIB.


9.   The CBN will continue to use appropriate channels of communication  in  these   matters and  hereby  assures  all stakeholders in the  country, of its continued support in all efforts aimed  at  strengthening the  Nigerian   economy   and  reducing   its vulnerability to shocks from  the external sector.

10.   The Central  Bank of Nigeria  will not issue further statements on this  matter and urges  the  general  public  to avoid  unnecessary politicization of  a technical matter while  awaiting the  outcome  of on-going consultation and reviews.

Ugochukwu Okoroafor,
Director, Corporate Communications

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