NBET Blames TCN For Obstructing $69.38m Debt Retrieval

The Nigeria Bulk Electricity Trading Company claims that a complaint filed by the Transmission Company of Nigeria hindered its efforts to reclaim approximately $69.38 million in debt owed by two overseas enterprises based in Benin Republic.

Under the watchful eye of the Federal Ministry of Finance, NBET manages power sales on behalf of the Federal Government.

The claim is encapsulated in the management’s rebuttal to the audit probe from the Office of the Auditor General for the Federation regarding non-compliance and internal control lapses within Ministries, Departments, and Agencies of the Federal Government of Nigeria for the fiscal year ending on December 31, 2020.

The audit review, bearing the signature of Auditor General Shaakaa Chira and designated with reference number AuGF/AR/2020/02, was officially delivered to the Clerk of the National Assembly on December 20, 2023, as stipulated by Section 85(2) and (4) of the Constitution of the Federal Republic of Nigeria, 1999 (as amended).

The management said “In June 2017, NBET and the TCN) through a joint letter, advised the Nigerian Electricity Company and Beninois Electricity Company respectively that they should continue to credit the account of TCN Market Operator pending the signing of the agreements that would put in place a new contractual /commercial framework with NBET.

“NBET proceeded to negotiate a new contractual/commercial framework with CEB and NIGERLEC respectively, but faced challenges from both TCN and the international customers in finalizing the new power sale agreements that would pave the way to fully assume the administration of these contractual relationships.

“While the government has directed NBET to conclude the international contractual engagements, TCN however wrote to the Federal Ministry of Power asserting that NBET has no role in the ECOWAS regional Electricity market and cannot be executing contracts with CEB and NIGELEC.

“The letter further stated that TCN has the responsibility to recover all outstanding debts and noted that they had reconciled the outstanding debt and were discussing a payment plan for offsetting the debt.

“Thus, it is the TCN that is in the best position to render an account for the outstanding payment. NBET is taking necessary steps for the recovery of its portion of the payments that have been credited to TCN.”

In its audit query to the government-owned company, the Auditor General for the Federation alleged that NBET failed to recover about $69.40m, translating to about N25.19bn (at the rate of N363 to a dollar as of 31st January 2019)

It said, “Paragraph 227(ii) of the Financial Regulations (FR) 2009 states “It is the responsibility of Accounting Officers to follow up outstanding items of revenue and to take all necessary steps to ensure collection or, where the collection is no longer possible, to apply to the Ministry of Finance for authority for a write-off, explaining the circumstances.

“Also, article 10.3 of CommunateElectrique Du Benin (CEB) and article 13 of Societe Nigerienne D’Electricite (NIGELEC) of the contract agreements allowed for the interest of 5 per cent per annum and 1 per cent interest per month to be charged on the outstanding amount owed by CEB and NIGELEC as set out in the CEB and NIGELEC PSAS respectively.

“Audit observed that the company entered into an agreement with two firms that are based in Benin Republic for the supply of electricity to those firms. From the review of records available for audit, the company commenced the supply of electricity in January 2015.

“As of January 2019, the value of supply made to the two foreign firms amounted to $315.41m.

“Review of invoices provided for audit, however, revealed that, as of January 2019, the firms had only made payments to the tune of $246.02m leaving an outstanding of $69.38m.

“The company failed to provide for audit clarification and efforts made to ensure the recovery of these huge amounts which in Naira, amounts to N25,19bn at the rate of N363 to a dollar as of 31st January 2019.”

Read also: Over 100m Nigerians Lack Access to Electricity -Tinubu’s Govt

This is just as the query added that the company failed to recover a loan of N188.36m from one of its Managing Directors and seven other staff members who are no longer in its employment.

Explaining the loan, the OAuGF said “Audit observed that the sum of N321.72m was paid to a former Managing Director of the company and seven other officers as staff mortgage scheme/revolving loans for the acquisition of properties while they were in active service.

“Of the above amount, a former Managing Director received the sum of N85.28m in January 2018, while the balance of N236,44m was paid to the seven officers in July 2016.

“At the time of disengagement from the Service in July 2020, the former Managing Director had only repaid the sum of N35.71m leaving an unpaid balance of N49.58m while the sum of N97,66m was recovered from the seven former officers of the company, leaving an unpaid balance of N138.78m.

“In all, the sum of N188.36m remained outstanding at the time of audit in October 2020, and all the officers in question were disengaged from service in 2018 without paying the outstanding loan of N188.36m.

Following NBET’s management failure to respond to the audit query, it was recommended that the Managing Director was tasked to provide reasons for the disengagement of officers who had a debt of N188.36m to pay.

The OAuGF report also accused the agency of failure to submit its audit report account as required by law from 2017 to 2019.

The report said, “Paragraph 3210(v) of the Financial Regulations 2009 states that the Chief Executive Officer shall submit both the Audited Accounts and Management Report to the Auditor-General and the Accountant General not later than 31st May of the following year of Account.”

“Despite the extant regulations, the Nigerian Bulk Electricity Trading Company failed to submit its audited financial statements for the years 2017 to 2019 to the Office of the Auditor-General for the Federation as at the time of audit in October 2020.

The company’s aforementioned actions violated current regulations concerning the submission of audited financial statements. The irregularities could be linked to deficiencies within the internal control framework at the Nigerian Bulk Electricity Trading Company in Abuja.

In its response, NBET management said The accounting firm of Aminu Ibrahim and Co, who were engaged following the grant of No Objection by the Bureau of Public Procurement has commenced the process of carrying out the audit of the 2017, 2018 and 2019 financial statements that are outstanding.

Africa Today News, New York

Leave a Reply

Your email address will not be published. Required fields are marked *