NNPC to Transfer Significant Part of its Revenue to CBN

Confidence UbaniFebruary 8, 20242 Mins read404

The Nigerian National Petroleum Company (NNPC) Limited and the Central Bank of Nigeria (CBN) have reviewed their decision to centralize a significant portion of NNPC’s revenues and banking services with the CBN.

On January 24, 2024, during the launching of the Nigerian Economic Summit Group (NESG) macroeconomic outlook report, the CBN governor announced that NNPC and the Ministry of Finance had reached an agreement to channel their foreign exchange inflows to the central bank, aiming to enhance the nation’s external reserves.

Both parties met again on Thursday to review this decision on the management of oil revenue. The collaboration between NNPC and the apex is reportedly aimed at fostering transparency and accountability. It would involve the implementation of enhanced digital platforms for transactions and setting specific limits for NNPC transactions.

According to a joint statement signed by NNPC spokesperson Olufemi Soneye and CBN Acting Director Hakama Ali, this decision seeks to ultimately contribute to the sustainable growth and development of Nigeria’s energy sector.

Joint statement from NNPC and CBN about the decision to transfer the oil firm’s revenue to CBN

NNPC’s Group Chief Executive Officer, Mele Kyari, and CBN Governor Olayemi Cardoso expressed their commitment to this collaborative effort.

Kyari provided further insights, explaining that the review aligns with the board’s directives to maintain safe obligor limits with commercial banks. He commended the CBN for creating a robust digital platform for transactions and a dedicated department to handle NNPC matters.

He said, “We understand very clearly that this review of our decision to move a significant portion of our revenues to the Central Bank of Nigeria is very timely. We made that decision to align with the directives of our board of directors to maintain safe obligor limits with commercial banks.

“We do need an additional support particularly from the central bank. We are a very huge company, our transaction liquidity levels are very high. And perhaps we’re the largest business in this country. And we’re also happy that this CBN has created a very robust digital platform for transactions and also created a department that will deal with NNPC issues and it will have non hindrance to our operation.

“We will continue to collaborate with the Central Bank of Nigeria to ensure that further improvements are received to ensure that this relationship serves the best interests of our company. And of course, ultimately, our country.”

Netizens have reacted to the joint statement, with some questioning the legality of the decision.

Atiku Abubakar, former vice-president and 2023 Presidential candidate, pointedly said that the federal government’s decision to transfer NNPC’s revenue to the Central Bank of Nigeria (CBN) is illegal.

“Although, as usual, of the current administration, little has been communicated to the public about explaining details of the decision.

“According to what is publicly available, the President has issued a directive that henceforth, the NNPCL would submit receipts for crude oil sales to CBN for vetting and documentation.

“Whatever may be the merit of the new arrangement, the presidential directive is a violation of the legal status of the NNPCL.

Let it also be stated that the Central Bank Act 2007 does not confer on the Central Bank of Nigeria, any responsibility for vetting the transactions of, or formulating and maintaining the internal controls and internal audits in state-owned enterprises, public or private”, he said.

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