How NNPC Spent About N800 Billion on Entertainment and Others Without Crediting the Federation Account

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NNPC Fails to Remit Money Into the Federation Account in 2022

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A(caps) few months ago, the Federal Government of Nigeria recounted that the Nigerian National Petroleum Cooperation (NNPC) has not deposited money into the federation account since the beginning of 2022. This unbelievable report caused a lot of debate across the country with many attributing it to a systemic corruption.

Nigeria is one of the highest producers of crude oil in the world. Data from Worldometer show that Nigeria produces 1,938,543 barrels of oil per day, making it the 15th highest oil producer in the world.

With the current oil price being on the rise, Nigerians have wondered What the NNPC spends the oil money on. The company, however, made a disclosure early this week about how the cooperation spent its generated revenue between 2020 to 2021.
 
How NNPC Spent About N800 Billion on Entertainment and Others Without Crediting the Federation Account


NNPC Shocking Administrative Expenditure for 2021

A breakdown of NNPC administrative expenses showed that N13.46 billion went into entertainment for its staff and over N20 billion for telephone calls and Postage within the two years

The Nigerian National Petroleum Cooperation disclosed that it spent a whooping sum of about N800 billion in 2021 on administrative management and operations.
 The sum of N788.7 billion spent by the company in 2021 was N140.1 billion above the N648.6 billion spent in 2020. The total expenditure disclosed by NNPC between 2020 to 2021 sums up to N1.4 trillion.

In its breakdown of the expenditure, NNPC explained that it has spent the sum of N11.83 billion on entertainment, while the sum of N1.636 billion was spent in 2020. The NNPC report also shows that the company spent N15 billion in 2021 for postage and phone calls which was time three the N5.6 billion spent in 2020.

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Other data by the company shows that in 2021 it spent, N7.5bn on security, N12 billion on staff training recruitment, N388.4 billion on employee benefits, N390 million on Director fees, N15bn on Transport, N46bn as legal and professional fees and 2.7bn on rent and N1.9 billion on printing and stationery.

Corruption in NNPC and Nigeria's Oil Sector

There had been speculations on the high rate of corruption within the cooperation and other oil companies in Nigeria. The overcharged expenditures disclosed by the cooperation show how Nigeria’s oil revenue has been mismanaged.

Nigeria has 80 percent of its total national revenue from oil and gas, making its economy mostly dependent on petroleum. However, the country has not received any money from its oil sales since the beginning of 2022.

The failure of the NNPC to deposit money into the federal account has affected federal allocations to states and the local government. The local governments have to depend on internally generated revenues to sustain themselves.

Nigerian Government Action to Counter Illegal Oil Bunkering


The Nigerian government recently contracted Tompolo, an ex-militant of the oil-rich Niger Delta region, to secure oil pipelines in the area. In recent weeks, the ex-militant and his team have discovered various illegal oil pipelines and refineries.

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Some of the illegal refineries are associated with the NNPC itself. However, there is yet no indication that the government is doing enough to stop the alleged corruption in the Nigerian oil sector.

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