Forensic Audit Underway As FG Targets NNPC Remittance Backlog

The federal government has commenced a forensic audit of the Nigerian National Petroleum Company Limited (NNPCL) Limited as part of efforts to determine the actual status of remittances into the Federation Account.

The minister of finance and coordinating minister of the Economy, Wale Edun, disclosed this on Friday during a press conference at his office in Abuja.

Edun said the audit was mandated by the Federation Account Allocation Committee (FAAC) and is currently ongoing.

He stated that the new executive order does not prejudice any ongoing action that had been taken including getting NNPCL to remit the revenue backlog to the federation account.

According to him, the review is expected to clarify outstanding remittance figures and determine what should accrue to the Federation Account under the new Presidential Executive Order on oil and gas revenues.

“There is an ongoing forensic audit of NNPC as mandated by FAAC. That is ongoing,” he said.

The Executive Order, recently approved by President Bola Tinubu, directs the immediate remittance of three key revenue streams to the Federation Account. These include the 30 per cent management fee on profit oil and profit gas, the 30 per cent allocation to the Frontier Exploration Fund, and gas flare penalties.

Edun said the directive followed a Federal Executive Council (FEC) review of deductions from the Federation Account, particularly the cost of collection and other charges that had reduced net inflows.

He noted that FEC had set up a subcommittee to examine the legitimacy and quantum of such deductions.

“The Federal Executive Council asked us to look at deductions from the Federation Account and, in particular, the costs of collection and the amounts being charged,” he said.

The minister stressed that the Executive Order does not prejudice any ongoing legislative or regulatory processes, including discussions around the Petroleum Industry Act (PIA).

He described the measure as a structural intervention aimed at improving transparency, accountability and the overall quantum of funds accruing to the Federation.

“This will reveal what the true remittance figures are,” Edun said, adding that implementation guidelines would be published and gazetted.

He disclosed that an implementation committee has been constituted to ensure efficient enforcement of the Order.

The committee, which includes representatives of states, is expected to meet next week.

Beyond NNPC, Edun confirmed that government is scrutinising cost-of-collection arrangements across revenue-generating agencies.

He said concerns had been raised about agencies retaining significant portions of collected revenue as collection fees, which are deducted before remittance to the Federation Account.

Under existing financial regulations and the Fiscal Responsibility Act, he said such agencies are not permitted to spend more than 50 per cent of their internally generated revenue, with the surplus required to be remitted to government.

However, he acknowledged that some agencies appear to have large budgets relative to state governments, prompting closer examination.

“All those deductions have been looked at and scrutinised,” the minister said.

He added that the review was necessary at a time when global financial markets remain challenging for developing countries.

With elevated commercial interest rates and tighter access to foreign capital, Edun said Nigeria must prioritise domestic resource mobilisation over expensive borrowing.

He argued that strengthening revenue collection, blocking leakages and ensuring full remittance would reduce pressure on public finances and create more fiscal space for investment in health, education and infrastructure.

The minister maintained that the government’s objective is not only to increase revenues but also to improve the transparency and accountability of how funds are collected and transferred into the Federation Account.

He expressed optimism that the combined impact of the forensic audit, the Executive Order and tighter scrutiny of cost-of-collection deductions would enhance confidence in Nigeria’s public finance framework. “We are looking at what should come into the Federation Account and what was going elsewhere,” he said.