Saturday, June 10, 2023

Audit uncovers how NPDC paid mechanics, electricians, other local workers $28.6 million in violation of federal law

The NPDC is a subsidiary of the Nigerian National Petroleum Corporation, the only entity licensed to explore the nation’s crude oil and gas for fuel and other products.

• May 25, 2023
Nigerian Petroleum Development Company Ltd
Nigerian Petroleum Development Company Ltd

In flagrant violation of the CBN Act, which states that the naira shall be legal tender for the payment of any amount in Nigeria, the Nigerian Petroleum Development Company Ltd (NPDC). was found to have paid its domestic staff in dollars, according to an audit report of the company seen by Peoples Gazette.

The NPDC is a subsidiary of the Nigerian National Petroleum Corporation, the only entity licensed to explore the nation’s crude oil and gas for fuel and other products.

In spite of the fact that the individuals hired were Nigerians already living in Nigeria and not foreigners, Felam Energy Services and Olometropole Petroleum & Gas Limited, two companies awarded ceiling contracts, received at least $14 million apiece, according to the NPDC’s audited financial statements.

“In the course of our review we observed that the contracts for the provision of manpower services for the operation of IGHF facility in favour of Messrs Felam Energy Services & Olometropole Petroleum & Gas Limited with a contract ceiling of $14,294,940.17 each for the duration of two (2) years were awarded in Dollar,” a section of the report titled “Dollarisation of IGHF operations Staff Salary payments,” said. The report did not state the year the contracts were awarded.

Section 20 (1) of the CBN Act states that “the currency notes issued by the Bank shall be legal tender in Nigeria at their face value for the payment of any amount” which made it illegal “to price or denominate the cost of any product or service (visible or visible) in any foreign currency in Nigeria,” according to the auditors.

The auditors noted that it was important that “no business offer or acceptance should be consummated in Nigeria in any currency other than the naira.”

“This is against the provision of the above Act especially as the contract is only for the payment of salary to personnel,” the report stated.

The audit firm, whose identity Peoples Gazette could not immediately verify, said it could not understand the reason the hired contractors who were Nigerians living in Nigeria would be paid in foreign currency as against the nation’s local currency, naira.

“Also the revenues generated from the IGHF where the personnel are providing the services are in Nigeria and the personnel employed are all Nigerians not expatriates,” stressed the audit report.

When the wages tabulated in the report were further examined, it became clear that each of the four mechanical engineers and the four electrical engineers made $9,000 per month. At the black market rate of N700 to a dollar – the most common exchange medium since the dollar wasn’t easily accessible in banks – their gross monthly income stood at N3.87 million each.

Additionally, for a 24-month period, 90 operators received $7,200 apiece, four quality control engineers received $9,000 each, and two maintenance planning schedulers received $12,960 each.

Every month for two years, the contract’s facility superintendents took $20,700 home with them.

In 2007, the Abuja Division of the Court of Appeal had ordered then finance minister Ngozi Okonjo-Iweala and external affairs minister, Olufemi Adeniji to refund their dollar-denominated salaries to the government, saying it was illegal to earn in foreign currency.

Based on reliefs sought by late human rights lawyer, Gani Fawehinmi, the appellate court ordered the duo to refund their dollar salaries to the federal government and subsequently accept their wages in the nation’s legal tender, an order that was immediately complied with.

The position of the nation’s anti-graft commissions’ towards the CBN Act violation by the NDPC is unknown as both the Independent Corrupt Practices Commission (ICPC) and Economic and Financial Crimes Commission (EFCC) did not immediately return requests seeking comments on the matter.

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