The organisation said the MDGIF also “failed to remit and report N12.480 billion (N12,479,683,553.87) in gas-flaring penalties for 2023.” It said the Auditor-General raised concerns about the failure to collect and promptly remit the net revenue generated by NUPRC from gas flaring into the MDGIF Account, as required by section 52(8) of the Petroleum Industry Act 2021.
“The Auditor-General is concerned that ‘the failure to remit gas-flaring penalties creates risks of shortages of funds for environmental remediation and potential civil crisis arising from the non-remediation of environmental hazards.’”
SERAP further said the MDGIF “engaged and paid a consultant N3.518 billion (N3,517,519,272.95) to recover gas-flaring penalties without the approval of the President.” According to the Auditor-General, “there was no evidence of due process or due diligence in the engagement.” The Auditor-General expressed concern that the money may have been “diverted.”
It also alleged that “NUPRC reportedly ‘failed to remit N38.610 billion (N38,610,104,671.31) in gas-flaring penalties collected and due to the MDGIF. The Auditor-General expressed concerns about the ‘risks of shortages of funds for environmental remediation and civil crisis arising from the non-remediation of environmental hazards.’”
According to SERAP, the MDGIF also “failed to collect and account for N12.940 billion (N12,940,311,072.81) in revenue from 2024 sales of natural gas.” The Auditor-General expressed concern that the money may have been “diverted”, and recommended its recovery and remittance to the Treasury.
The organisation said the MDGIF reportedly spent N261.852m to engage Transaction Advisors, but the Auditor-General found no evidence of work done.
“The MDGIF reportedly spent N261.852 million (N261,851,719.18) to engage Transaction Advisors, but the Auditor-General found no evidence of job execution by the Transaction Advisors and expressed concern that the money may have been ‘diverted.’”
It added that the MDGIF spent another N65.8m on Transaction Advisors without due process. “The MDGIF also spent N65.8 million (N65,800,000.00) to engage Transaction Advisors in August 2024 without due process. The Auditor-General stated that the action ‘may have violated public procurement procedures’ and recommended that the Executive Director of the MDGIF account for the expenditure.”
SERAP said the alleged failures represented a broader problem with financial controls in the management of the petroleum sector.
“The failure to properly account for billions of naira in petroleum-product revenues, natural-gas sales revenues and gas-flaring penalties undermines public confidence in the management of Nigeria’s petroleum resources and creates a serious risk that public funds intended for lawful public purposes, including environmental remediation, may have been lost, misapplied or improperly withheld.”
It further stated, “The failure to remit billions of naira in revenues and gas-flaring penalties, the absence of supporting documentation for several expenditures, payments without evidence of work performed, and procurement and consultancy arrangements without the required approvals or due process also raise serious concerns about the adequacy of existing safeguards over public funds.
“The audit findings reveal repeated failures of basic financial and administrative controls, including the failure to remit and account for public revenues, inadequate documentation, payments without evidence of work performed, procurement and consultancy arrangements without required approvals or due process, and failures to submit and publish audited financial statements.”
It said accountability was particularly important because some of the funds involved were gas-flaring penalties intended to support environmental remediation.
“Transparent investigation and accountability are especially important where the public funds concerned include petroleum revenues and gas-flaring penalties that should be available for lawful public purposes, including environmental remediation and the protection of affected communities.”
SERAP also criticised the failure to publish audited financial statements for the MDGIF for three consecutive years. “The failure to submit and publish audited financial statements for three consecutive financial years also undermines effective legislative oversight and public scrutiny of the financial management of the MDGIF.”
The organisation said the demands were also supported by constitutional and international anti-corruption obligations.
“Section 13 of the Nigerian Constitution 1999 (as amended) imposes a responsibility on government to conform to, observe and apply the provisions of Chapter II of the Constitution. Section 15(5) requires the State to abolish all corrupt practices and abuse of power. Section 14 further provides that the security and welfare of the people shall be the primary purpose of government”, it stated.
SERAP added, “Nigeria is also a state party to the UN Convention against Corruption and the African Union Convention on Preventing and Combating Corruption, which require effective measures to prevent, investigate and sanction corruption and promote accountability and transparency in the management of public resources.”
It further cited the UN Convention, saying, “Article 9 of the UN Convention requires appropriate systems of public procurement and public finances founded on transparency, competition and objective criteria. Article 10 requires measures to enhance transparency in public administration, including access to information. Article 13 recognises the role of civil society and public participation in preventing and combating corruption.”