The probes by various committees of the National Assembly revealed the depth of the depravity and the reckless lack of accountability in the management of the proceeds from crude oil, which contributes over 80% of our national revenue.

It was disturbing, for example, to listen to the incoherent responses of the management of NNPC and the Central Bank on the existence of a ‘secret’ federal government account with JP Morgan (international merchant bankers).

The Deputy Governor of CBN, Mr. Tunde Lemo, told the Senate Committee on Fuel Subsidy that the NNPC operated an account at JP Morgan to receive proceeds from sale of crude oil, contrary to the constitutional provision of Section 162(1) that all moneys should be paid into the federation account with the CBN.  However, Lemo’s position was frontally contradicted the very next day by Mr. Bernard Otti, NNPC Executive Director of Finance, who maintained unequivocally that the JP Morgan account was actually opened by the CBN on NNPC’s behalf in 2002, and that the apex bank has remained the sole signatory to the account!!

Incidentally, the newly appointed NNPC Group Managing Director, Andrew Yakubu, who also appeared before the Senate Committee, corroborated Bernard Otti’s testimony.  Indeed, Yakubu further testified that “the NNPC has no direct contact with the JP Morgan account; the account was opened by the CBN on behalf of NNPC; the account is operated for the NNPC by the CBN; CBN has its own correspondence bank to which NNPC isn’t a party; NNPC does not operate that account; NNPC operates domiciliary account with the CBN…. The CBN is the only signatory to the account and as such, we have no relationship whatsoever with JP Morgan; we don’t have the mandate.  JP Morgan is a correspondent bank for the CBN on NNPC’s domiciliary account; NNPC cannot give instruction directly to JP Morgan, but through the CBN. ”

The testimony of the Finance Minister, Dr. Okonjo-Iweala was equally discomforting, as she hesitantly parried questions on the JP Morgan account.  Although the Coordinating Minister of the Economy acknowledged the existence of the account, she admitted that she knew next to nothing on the account’s operations.  She added that “…because the federal government does not maintain any foreign account… as they rely on money either being transmitted to federation account… as the Ministry of Finance cannot go abroad to collect the money itself, so they rely on government agencies to do so”.  

She regrettably ultimately succeeded in creating an unnerving feeling that she was not on top of her job with regard to the custody and management of our crude export earnings.  

The question is if the Coordinating Minister of the economy does not have direct access to such information, then, how can she confidently present accurate and sustainable sources of funds statement in the preparation of the national budget?  The question also arises, how many other such orphaned but lucrative bank accounts exist in the name of the Federal Republic of Nigeria?  Who or which agencies established these accounts and on what authority were the accounts opened?  Furthermore, who manages and authorises withdrawals from these accounts, and for what purposes have the withdrawals been applied?   

In the light of the controversy, the Senate Committee has directed the NNPC and CBN, to submit a joint paper on transactions in the JP Morgan account, and further directed that the account be closed.  However, some critics believe that the Senate Committee, itself, fell short in its recommendations; it probably would be much more rewarding if the House Committee demanded additional independent information, such as, how much had been paid into JP Morgan account since its establishment in 2002 and how much was received in the federation acount?  If it is a savings account, how much interest had been paid into that account since 2002?  How long does it take for the balances in the JP Morgan account to be captured in the federation account?  Many other such questions remain largely unanswered.

In similar vein, Nigerians also recall the embarrassingly widely divergent statistics on fuel imports and subsidy payments from critical stakeholders like NNPC, PPPRA, CBN and the Finance Ministry, when the management of these agencies testified at the House of Representatives probe of the suspected rip-off in the administration of the fuel subsidy scheme.

In the light of the above, the Senate Committee will fail in their duties, if they recoil from shinning more light on the foreign exchange and reserves management practices of the CBN. 

If simple accounting for commodity payments is so controversial, it is likely that the accounting process of reconciling dollar export revenue with naira substitutions at CBN’s unilaterally determined rates before allocation might also open a more horrid can of worms!!