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N135bn intervention fund: CBN, Petroleum Ministry engage in confrontation

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The disbursement of N135 billion by the Central Bank of Nigeria (CBN) to certain companies in the oil and gas sector became the center of a heated confrontation as the apex bank and the Ministry of Petroleum clashed during a hearing on Thursday.

Prior to the hearing, Senator Jarigbe Agom Jarigbe, the Committee Chairman, summoned 15 companies to appear before the Committee to justify the disbursement which they had been reluctant to repay.

During the investigation, Mrs Oluremi Komolafe, the representative of the Ministry of Petroleum, claimed that although the intervention was initiated by the Ministry, they were unaware of the disbursement made by the CBN.

She disclosed that the Ministry had received 150 applications, out of which 69 companies were recommended, and 16 applications were still under processing. She further stated that the recommended companies were forwarded to the CBN for necessary action, emphasizing that the Ministry did not process the list.

The CBN, represented by the acting Director of Project Finance, Alhaji Sahaad, absolved the bank of any blame and clarified that they merely provided guidelines for the disbursement of the intervention loan to the beneficiary companies. He stated that the actual disbursement was carried out by commercial banks.

He emphasized, “The primary responsibility lies with the banks. CBN was not involved in the disbursement. Our role is to facilitate the loan to ensure single-digit interest rates and a fairly long tenure.” He also emphasized that the CBN’s role was to assist in securing the loan.

In response, Senator Jimoh Ibrahim contended that the CBN should have been aware of the disbursement and involved in the process, as commercial banks could not disburse the intervention fund without the guidance of the apex bank. He expressed dissatisfaction with the excuses provided by the parties.

The Committee Chairman warned of potential involvement of anti-graft agencies to recover the funds from defaulting beneficiaries, citing disparities in the disbursement of the intervention loan. He specifically highlighted instances where the disbursements exceeded the stipulated threshold, particularly in the cases of Dangote Refinery and Pinnacle Oil and Gas, which utilized the funds to finance their refinery and depot projects, insisting on the reimbursement of the funds to the Federal Government.

The lawmakers also revealed that companies such as Dangote Refinery and Pinnacle Oil and Gas had utilized the fund for projects in violation of the guidelines.

They concluded that the CBN and the Ministry of Petroleum Resources were at odds, and the beneficiary companies were exploiting the situation to avoid repaying the loan.

The 15 companies summoned by the Senate included Nigeria Independent Petroleum Company, Plc, NIPCO, Hyde Engineering and Construction Company, Pinnacle Oil and Gas, Dangote Oil Refinery, Lee Engineering and Construction Company, and Nova Gas, among others.

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