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PwC’s Forensic audit report on NNPC: Matters Arising

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Diezani Alison-Madueke

Diezani Alison-Madueke

LAGOS-THE long-awaited report of the forensic audit of the Nigerian National Petroleum Corporation (NNPC) which the Federal Government hired PricewaterhouseCoopers (PwC) to conduct has finally been released.

As with almost everything in these political times, the forensic audit was elevated into a campaign issue when some politicians began to raise questions about why it was taking so long for the report to be released, insinuating that it may have been swept under the carpet by an administration they believe has a proclivity for supporting corruption. The release of the report has defused all such impressions imagined or real.

The idea of a forensic audit of NNPC was the brainchild of the Coordinating Minister of the Economy and Minister of Finance, Dr.Ngozi Okonjo-Iweala, who suggested during the Senate probe of the allegation of non-remittance of $49.8bn oil revenue into the Federation Account levied by the former Governor of the Central Bank of Nigeria (CBN), Mallam Sanusi Lamido Sanusi, against NNPC. Dr.Okonjo-Iweala had submitted before the Senate Committee on Finance that considering the level of interest and controversy that the allegation had generated it was good to have a forensic audit carried out on NNPC’s books to get to the bottom of the issue once and for all.

In order to understand the issues raised and the recommendations made in the PwC forensic audit report, it is pertinent to note that the starting point of the issues that led to the audit was the allegation of unremitted $49.8bn revenue from crude oil sales between January 2012 and 31 July 2013. Though the former CBN Governor (now Emir of Kano) who made the allegation had variously changed the figures of alleged unremitted revenue to $10.8 and $20bn, it must not be forgotten that he started the allegation with $49.8bn.

The summary of the forensic audit report which the Auditor General of the Federation, Mr. Samuel Ukura, presented to the public recently indicated that the allegation of unremitted $49.8bn, $10.8bn or $20bn was false. The report was emphatic that the total amount that accrued from crude oil lifting was $67bn out of which a total of $50.81bn was remitted into the Federation Account. The balance, the report stated, was used for petrol and kerosene subsidies and NNPC operations expenses.This position as reflected in the forensic audit report is consistent with the position that NNPC has always canvassed regarding the alleged “missing oil revenue”.

The other issue thrown up in the forensic audit report is the $1.48bn which the audit firm recommends that NNPC should pay into the Federation Account. This is where there has been so much misunderstanding which led to the various screaming headlines that the report indicted NNPC. The $1.48bn, according to the report, is “unremitted NPDC signature bonus due for divested assets and taxes/royalties”.

It needs to be stated that signature bonus, taxes and royalties on the divested assets were not part of the crude oil lifting revenue which the original allegation of “missing $49.8bn oil revenue” was about. Signature bonus is the book value of oil assets. It is usually determined by the Department of Petroleum Resources (DPR) based on certain parameters. What happened in the case of the divested oil blocks by Shell and which were assigned to the Nigerian Petroleum Development Company (NPDC), the Exploration and Production subsidiary of NNPC, was that DPR estimated the book value of the oil blocks to be $1.847bn.

NNPC raised concerns with the parameters used for computing the book value of the assets. While the issues were being reconciled with the DPR, NNPC went ahead to pay over $300m as a token to indicate its interest in acquiring the blocks pending when the issues it raised over the parameters used in calculating the signature bonus were resolved. This much was explained by the Group Managing Director of NNPC, Dr. Joseph Dawha, at a press conference recently.

The point in the above explanation is that the $1.48bn is distinct from the revenues from oil lifting between 1st January 2012 and July 2013 which the allegation of unremitted $49.8bn was all about. This distinction helps to highlight the error in the interpretation of the recommendation of the forensic audit report with regard to the remittance of the $1.48bn made in some quarters that NNPC was indicted in the report. The recommendation that NNPC/NPDC should remit the outstanding signature bonus to the Federation Account does not amount to indictment in anyway as the amount is not part of the original amount alleged to be missing or unremitted. And the fact that NNPC had already commenced payment of the signature bonus as indicated in the PwC forensic audit report shows that it actually had the intention to pay the money as soon as the concerns it raised over the parameters deployed in calculating the bonus were resolved. In any case, the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, has directed NNPC to pay the outstanding $1.48bn forthwith.

The other issue which the report has thrown up has to do with the extant laws and business model which NNPC is constrained to run. The report recommends that the NNPC Act which “provisions contradict the requirement that NNPC be run as a commercially viable entity” must be reviewed as a matter of urgency. The report highlighted the fact that the issue of deduction of its operation costs and expenses from crude oil sales proceeds by NNPC for which the Corporation is pilloried daily is a legal issue made possible by the provisions of the NNPC Act which established the Corporation. The audit firm recognized and recommended that the way to go about correcting the anomaly is to review the legal framework and thereby the business model of the Corporation.

This once again underscores the need to urgently pass the Petroleum Industry Bill (PIB) which has been in the works in the National Assembly for upwards of five years. In fairness to NNPC, it has commenced a Transformation Programme aimed at retooling its structures and making it more commercially focused ahead of the post-PIB era. The duty of passing the Bill does not lie with the NNPC but with the National Assembly. It is in the interest of all Nigerians for the PIB to be passed expeditiously to free NNPC to run as a commercial entity as recommended in the PwC report.

Until the PIB is passed to provide a legal foundation for the reforms recommended in the PwC report the nation will not be completely rid of allegations of unremitted revenues, the type that led to the long inquisition that has been fortunately laid to rest with the forensic audit report conducted by PwC.

Mr.  Baridon Leton, a human rights activist, wrote from Port-Harcourt, Rivers  State.

Business

VP Shettima insists tax reforms will improve lives and not impoverish Nigerians

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Modupe ASUDO
Vice President Kashim Shettima, on Wednesday in Abuja, said the implementation of new tax reforms will eliminate the burden of multiple levies and charges on small businesses and low-income earners in Nigeria, thereby helping to reduce poverty.
Shettima noted that the planning and implementation of the tax reforms were carefully designed to improve livelihoods, contrary to the claims of political detractors.
The Vice President spoke on behalf of President Bola Tinubu at the interfaith breaking of fast for Ramadan and Lent held at the State House. Attendees included members of the Federal Executive Council, the Central Bank governor, special advisers, senior special assistants and heads of agencies and parastatals.

Nigerisa’s Vice President Kashim Shettima

Shettima urged them all to remain champions of the government’s reforms.
He said the government is genuinely concerned about Nigerians’ plight and is releasing policy instruments to lift many out of poverty without adding to their burdens.
“The same people who are shouting hoarse that the tax reform is meant to pulverise further and pauperise the poor are far from the truth, but we have to go out and tell the truth to the people.
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“We have to educate them. We have to mount the pulpits and take our government to the Nigerian people and tell them the truth,” he said.
Shettima highlighted some of the gains of the economic reforms, including an increase in the nation’s foreign exchange reserves, streamlining of the exchange rates and the removal of a subsidy that had favoured only a few for many years.
He said President Tinubu should be commended for the courage to address the issues that past administrations avoided.
The Vice President explained that the removal of the fuel subsidy was not mentioned in the President’s 2023 inaugural speech. Still, the President had to announce it, knowing that the system was draining the economy of resources for development.
“Three years down the road, the economy has bounced back,’’ he added.
“On behalf of the President, I want to thank you all for comradeship, support and partnership,’’ he stated.
Shettima advised government officials to be more active in sharing facts about the administration’s achievements and to be ready to counter falsehoods propagated by the opposition parties.
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AfCFTA $3.4 Trillion Market in Focus as NCDMB, Others move to deepen Intra-Africa Trade

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By Modupe Asudo

The 2026 edition of the African Continental Free Trade Agreement (AfCFTA) Summit got underway in Lagos on Monday with regulatory agencies, project promoters, and financial institutions focused on deepening intra-Africa trade, a unified code of standards for professional qualifications and manufactured goods, and expansion of the frontiers of technological development and innovation.

Critical questions addressed include how AfCFTA’s 1.4 billion population and $3.4 trillion economy could achieve “a strategic shift from fragmented economies towards a globally competitive supply chain system”; how Africa could leverage its vast mineral resources, including copper, iron ore, petrochemical, for domestic production of hardware such as Christmas tree (an assembly of valves, fittings on top of a wellhead to control oil production), and how, hypothetically, Tema Shipyard in Ghana could be designated the vessel construction, assembly and repairs hub for Africa.

Related questions were how cables manufactured in Nigeria, hypothetically, could benefit from favourable trade terms in Angola; what compliance requirements a sacrificial anode producer in Nigeria would have to meet in regard to the rule of origin requirement to export anodes to Algeria for protection and longevity of pipelines, storage tanks, offshore platforms, etc., and what other support levers would be required to achieve energy security for Africa besides expanded refining capabilities in Dangote Refinery, laying of continental gas transmission pipelines, and establishment of industrial parks and other support infrastructure.

In a keynote address at the event, the Executive Secretary of the NCDMB, Engr. Felix Omatsola Ogbe, represented by the Director, Corporate Services, Dr. Abdulmalik Halilu, disclosed that Nigeria’s oil and gas industry embraced AfCFTA and developed a framework for domesticating the policy in 2022.

According to him, implementing AfCFTA in the industry was anchored on three broad pillars, namely, Opportunities Identification, Capacity Development, and Capacity Exportation. In regard to opportunities, he said Nigeria’s strength lies in formidable supply chain in oil field services, refining capacity, oil field logistics base, gas supply pipelines, and a pool of qualified oil field technical workforce.

On capacity development, he pointed out that Nigeria’s oil and gas industry, through the local content law, has developed capabilities in the oil and gas value chain spanning marine vessel asset ownership, fabrication, assembly and installation of production systems, including Christmas trees, pressure vessels, and pumps.

What remains unresolved, described by the Executive Secretary as “the next frontier and the reason for convening the Summit,” is capacity exportation. He posited for consideration a unified work permit and visa that would enable, say, “a welder in Senegal to be engaged in Arlec Engineering Works, Johannesburg, South Africa, for fabrication of heat exchangers, storage tanks, pressure tanks, pressure vessels, etc.”

In examining the importance of achieving continental economic integration, Engr. Ogbe explained that strong regional supply chains would shift Africa from exporting raw materials to producing high-value goods.  For pathways to integration, he listed regional value chains, infrastructure connectivity, regulatory harmonization, industrial clusters, and small and medium scale enterprises (SME) inclusion.

He assured industry stakeholders and participants maximum support by the NCDMB.

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AfCTA: NCDMB provides roadmap to $3.4tn continental market

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By Modupe Asudo

The Nigerian Content Development and Monitoring Board has outlined a practical framework for positioning Nigeria’s energy sector to access the African Continental Free Trade Area, following a strategic webinar focused on meeting rules-of-origin requirements for continental trade.

The Board held a pre-conference webinar on Wednesday ahead of the Nigeria Local Content AfCFTA Energy Summit scheduled for Monday, February 9, 2026.

The engagement was attended by stakeholders from the oil and gas, power and renewable energy sectors, and they addressed how Nigerian products and services can qualify for preferential market access across 54 African countries with a combined gross domestic product of $3.4tn and a population of about 1.4 billion people.

NCDMB Charges Indigenous Companies On Compliance As Nigerian Content Level Hits 54% In 2022Entitled ‘Meeting AfCFTA Origin Requirements in Energy Trade’, the webinar focussed on one of the major barriers facing Nigerian exporters under AfCFTA — structuring production and operations to meet origin requirements that determine eligibility for duty-free and preferential trade.

The initiative was supported by the Executive Secretary of NCDMB, Engr. Felix Omatsola Ogbe, and the Acting Director of Planning, Research and Statistics, Mr. Ene Ette, as part of preparations for the forthcoming Nigeria Local Content AfCFTA Energy Summit, with the theme ‘Unlocking Africa’s Energy Future through AfCFTA: Trade, Innovation and Regional Integration’.

Speaking during the session, a communications analyst, Joseph Nwokedi, representing the Acting National Coordinator of Nigeria’s AfCFTA Coordination Office, Mrs Patience Okala, stressed the central role of energy in Africa’s economic integration under AfCFTA.

He urged Nigerian companies to shift their focus from Nigeria’s domestic market of about 200m people to the wider continental market of 1.4bn consumers.

“Without energy, there’s no industrialisation. Without energy, regional value chains remain aspirational,” Nwokedi said. “With AfCFTA, energy transforms from a domestic infrastructure issue into a tradable, investable and exportable sector within an integrated African market.”

He noted that even one per cent penetration of the African market translates to about 14m consumers, underscoring the scale of opportunity available to Nigerian energy firms.

The webinar identified four key pathways through which Nigeria’s energy sector can participate in AfCFTA-enabled trade. First, Nigeria’s Electricity Act of 2023 allows independent power producers to supply electricity directly to industrial clusters and export processing zones, positioning power generation as a foundation for trade-ready manufacturing.

Second, the country has submitted commitments under AfCFTA that enable professionals such as engineers, electricians, geophysicists and energy auditors to export services across Africa, subject to mutual recognition of qualifications.

Third, refined petroleum products, gas derivatives, electricity and renewable energy components can be traded across borders under preferential tariffs, provided they meet AfCFTA rules of origin.

Fourth, AfCFTA’s investment protocol, combined with recent domestic reforms, including the Presidential Directives on Investment Incentives for 2024–2025, strengthens Nigeria’s credibility for attracting cross-border investments in power generation, transmission, renewable energy and storage infrastructure.

Delivering a technical presentation, Assistant Comptroller of Customs, Burhan Sulaiman, explained that AfCFTA would eliminate tariffs on 90 per cent of goods traded within the bloc over five to 10 years, with an additional seven per cent liberalised over 13 years. However, he stressed that these benefits were conditional on meeting origin requirements.

“Companies lose benefits because origin was treated as an afterthought,” Sulaiman said. “You must build in origin compliance from the beginning, not while already running your project. Origin determines whether you export duty-free or pay full tariffs.”

He clarified that origin is determined by where economic production takes place, not by company ownership or registration. Foreign-owned companies producing in Nigeria can export as Nigerian origin, while Nigerian companies importing finished goods cannot claim AfCFTA preferences.

Sulaiman explained that products qualify for preferential access through two routes. “Wholly obtained” goods are entirely produced within AfCFTA member states, such as crude oil and natural gas extracted in Nigeria, as well as locally generated electricity regardless of fuel source.

The second route, “substantial transformation”, applies where foreign inputs are used and requires compliance with one of three tests: a change in tariff classification; a value-addition threshold limiting foreign content to between 30 and 60 per cent of ex-works price; or completion of specific prescribed processes such as distillation, cracking or reforming for petroleum products.

He provided sector-specific guidance, noting that in oil and gas, locally extracted crude and gas qualify, just as refined petroleum products that meet processing requirements. However, simple blending, basic distillation operations and modular refineries using imported crude without substantial transformation do not qualify.

In the power sector, he explained, locally generated electricity and regionally manufactured equipment with deep component transformation qualify, while installation-only activities, imported turbines, transformers and switchgear mounting do not.

“For renewables, regional solar cell and battery cell manufacturing with deep component processing qualify,” he said, adding that panel installation alone, simple module assembly and packaging imported batteries do not meet the thresholds.

Sulaiman warned that without regional manufacturing accumulation, power equipment exports fail origin tests.

According to him, the Nigeria Customs Service applies a five-step verification process for origin claims, including confirming accurate HS codes, reviewing production records, testing for minimal operations, verifying African input origins and ensuring consistency across certificates, production records and cost documentation.

“Weak documentation kills origin claims. Even genuinely originating products can be denied if documentation is incomplete or inaccurate,” he noted.

Both speakers emphasised that origin compliance should be treated as a core business strategy rather than a regulatory formality.

“Origin is not paperwork; it is strategy,” Sulaiman said. “It shapes where you locate facilities, how you source inputs, and where you sign regional contracts. Treat it as strategic from day one.”

Nwokedi urged Nigerian firms to act early. “AfCFTA is happening now. Early movers will shape supply chains, standards and partnerships. Are you going to lead, or simply follow?”

Officials also provided updates on AfCFTA implementation, noting that 92 per cent of rules of origin had been agreed, with negotiations ongoing in the textiles and automotive sectors.

An online dispute resolution mechanism has been established to coordinate Customs authorities, standards bodies and complainants.

Nigeria has deployed a fully operational electronic certification system for paperless trade, while Nigerian Customs is introducing risk-management frameworks that could allow exporter self-certification on commercial invoices.

Following a five-year implementation review led by the Minister of Industry and Investment, Dr Jumoke Oduwole, government sensitisation efforts have intensified through partnerships with the Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture; Women’s Chambers of Commerce; zonal outreach programmes and ‘P3 engagements’ involving the press, private sector and public institutions.

“The government will not trade under AfCFTA — our exporters will,” officials said. “If they win, we win.”

Nigerian Customs also reiterated its open-door policy for pre-export origin verification to help businesses avoid delays and additional costs at the border.

The webinar highlighted Nigeria’s potential as a regional energy and transition-fuel hub, building on frameworks such as the West African Power Pool to support cross-border electricity trade.

Key recommendations included structuring projects for origin compliance from inception, forming regional joint ventures, aligning with continental standards and leveraging AfCFTA service commitments to export Nigerian energy expertise.

The session ended with confirmation that the webinar was a technical precursor to the Nigeria Local Content AfCFTA Energy Summit, which will convene policymakers, industry leaders and trade experts to develop strategies for maximising Africa’s energy potential under the AfCFTA framework.

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