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President Olusegun Obasanjo Wednesday halted, midway, the presentation of the audit report on the oil and gas sector midwifed by the Extractive Industry Transparency Initiative (EITI) for its failure to trace a $250 million net difference (about N33.3 billion) and $1.264 billion (about N168 billion) gross difference in the audited accounts.
• Takes $2.5bn loan from China
President Olusegun Obasanjo Wednesday halted, midway, the presentation of the audit report on the oil and gas sector midwifed by the Extractive Industry Transparency Initiative (EITI) for its failure to trace a $250 million net difference (about N33.3 billion) and $1.264 billion (about N168 billion) gross difference in the audited accounts.
The presentation of the audit report was being made to the Federal Executive Council before its weekly meeting by an official of the American audit firm, Hart Group that handled the job, before the stoppage.
Mr. Chris Nurse said that these amounts could not be reconciled due to discrepancies in the reports of oil companies and that of the Central Bank of Nigeria (CBN), which the report said kept bad records before now.
'The quality of the records in the early years was really not good," he stated.
Incensed that the report did not get to the root of the matter by tracing the whereabouts of the net and gross differences, President Obasanjo ruled the audit report incomplete until the discrepancies could be explained.
Spirited effort by both the chairman of the EITI, Mrs. Oby Ezekwesili and the Minister of Finance, Dr. (Mrs.) Ngozi Okonjo-Iweala to convince Obasanjo to allow completion of the presentation failed as he directed the Hart Group to go back to work and identify the sources of the discrepancies.
Wondering why the issue was not resolved before Wednesday's presentation, Obasanjo pointed out that the failure to trace the money gave room for many Nigerians to want to think that it has been stolen
'If you know the society which I have the fortune of leading, it is as good as somebody has gone away with $1264 million and it cannot be anybody other than Obasanjo. This is the truth. We have had a case like this before.
'You should get to the root of this by stating that so much was entered into the account of the Central Bank that could not be traced back to the oil companies and so much was paid by the oil companies that could not be traced into the accounts of the Central Bank", he stated, while directing the audit firm to go back to work.
Explaining the discrepancies, Mrs. Ezekwesili cited a 1999 CBN report, which showed a receipt of $70 million less than what the companies said they paid as well as that in 2000 where it recorded $90 million more than the companies said they had actually paid.
'That in itself is a challenge. It does not mean that money has been misappropriated, but when you have these control measures, you curtail the opportunity for something to go wrong", she pointed out.
President Obasanjo had insisted that 'even that net difference, you should have gone into it and told us why the net difference. As far as I am concerned, is it something that could have come from the oil companies that has not come or is it something that was missing in the Central Bank or what was it?
'Look, I know the society that I am dealing with. Even if it will take you three months to come to this, let us have it in three months. All that the Nigerian people will see or the Nigerian press is the $1264 million gross difference.
'Why are we making a presentation when we are not ready? Two hundred and fifty million dollars, to me, a very, very important and large amount of money. So what you (auditors) now have to say to me or do for us, is where is this discrepancy. How did it occur? Can we reconcile? I am interested in that", he further pointed out.
In the report, the accountant-general of the federation was said to have problems managing, proactively, what was coming out from the nation's oil and gas sector as he depended on CBN for reports which were not forthcoming due to some inexplicable reasons.
The presentation generated some debate with the Minister of Agriculture, Dr. Adamu Bello; Minister of Science and Technology, Prof. Turner Isoun; Minister of Aviation, Prof. Babalola Borishade; Minister of Sports, Dr. Seidu Samaila Sambawa and Minister of State for Petroleum, Dr. Edmond Dakouru demanding a more comprehensive report that would provide answers to the discrepancies identified in the report.
In another developoment, barely two weeks after Nigeria cleared its debt at Paris Club, President Obasanjo has borrowed $2.5bn from China.
In a letter to the Senate to notify it of the development, President Obasanjo said that the loan was one of the outcomes of the Strategic Relationship and Partnership between Nigeria and China, which was agreed upon between the two countries when Obasanjo visited China in April last year.
According to the President, the loan, which was given at concessionary interest rate of 3 percent, would be dedicated to infrastructure development.
Specifically, he said 1 billion US dollars would be dedicated to the Mambilla Hydro project , while the other 1 billion US dollars would be for the resuscitation of railway system in Nigeria and the remaining 500 US million would go for rural telephony and power transmission.
In a related development, the president has forwarded the name of Justice Salihu Alfa Belgore to the Senate to be confirmed as the Chief Justice of Nigeria. The incumbent CJN would be retiring from office by June 12, 2006.