State governments have called for a forensic audit of crude oil-backed loan deals worth about $8.8bn, raising concerns over transparency and declining revenue to the Federation Account.
The demand was made during a retreat organised by the Federation Account Allocation Committee Post-Mortem Sub-Committee. The meeting brought together financial experts, revenue agencies, and government officials to review issues affecting national revenue.
Participants expressed concern about several crude-for-loan agreements involving the Nigerian National Petroleum Company Limited.
Reports show that the national oil company committed about 272,500 barrels of crude oil per day to service multiple loan facilities valued at about $8.86bn.
Available data indicates that roughly $2.61bn has been repaid, while about $6.25bn remains outstanding.
State officials said the complexity of the agreements makes it necessary to conduct a detailed forensic investigation. They stressed that the audit would help determine the full financial impact of the deals on government revenue.
In a communiqué issued after the retreat held in Enugu, participants recommended that all crude-backed borrowing arrangements should undergo legislative approval and independent auditing.
They also called for full public disclosure of the agreements to strengthen transparency in the management of oil revenues.
The meeting focused on persistent revenue leakages affecting the Federation Account, which serves as the main pool for sharing government income among the federal, state, and local governments.
Participants noted that several challenges continue to reduce the amount of money available for distribution.
These include weak oversight, revenue leakages, and large deductions made before funds are paid into the Federation Account.
Some of the deductions, they explained, are linked to subsidy payments, operational costs, and debt obligations taken directly from oil revenue.
The retreat also reviewed developments in the petroleum sector following the introduction of the Petroleum Industry Act.
While the law was designed to improve transparency, participants said some operational practices in the sector still require closer monitoring.
Analysts believe that a portion of Nigeria’s crude oil production is already tied to debt repayment through crude-backed financing arrangements.
Experts warn that such commitments could reduce the amount of oil revenue that eventually reaches government accounts.
Participants therefore stressed the need for stronger oversight and improved access to financial data for auditing institutions.
They concluded that better transparency and accountability are essential to protect Nigeria’s oil revenue and strengthen public finance management.
Be the first to comment