N1.2tr unremitted oil money raises fresh concern over FG’s revenue agencies

Posted by News Express | 2 June 2022 | 273 times

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NASS, FRC, NEITI, stakeholders decry loopholes, continuous borrowing


Stakeholders, yesterday in Abuja, raised serious concern over loopholes in revenue collections and remittances to government accounts by Federal Government agencies, a development, which may have resulted in over $1.3 billion (N540 billion) and another N670 billion unremitted revenue from the oil and gas sector alone.

Lapses by government agencies, lack of monitoring and undue advantage given to some companies operating in the country, especially in the free trade zones, equally worried the experts who gathered at the Growth Initiatives for Fiscal Transparency (GIFT) organised by OrderPaper Advocacy Initiative.

The House of Representatives Committee on Public Accounts (PAC), represented at the event by its chairman, Busayo Oluwole Oke, disclosed that the Nigerian National Petroleum Company (NNPC) Limited have questions to answer over oil and gas revenue hovering at $2.3 billion. 

According to him, the funds were unremitted between 2014 and 2019 and included delayed payments by customers without evidence of any surcharge for the delays to the tune of $510,020,921.79; incomplete payments by customers totaling $6,203,863.68 and another outstanding payments by customers standing at $80,452,746.83. 

The PAC chairman, pointing to audited documents by the country, noted that $235,685,861.31 was transferred to an undisclosed escrow account – due from the sales of gas to NLNG, adding that there was unexplained shortfall on NLNG balances standing at $18,389,334.23 and payment for gas exports of $346,211,227.59 through NGL Funding Account instead of the Federation Account.

According to him, there was equally $2,664,047.64 unexplained and unsubstantiated foreign exchange losses on sums paid into the Federation Account while sales without payment status, payment details or payment confirmation from the national oil company stood at $9,389,105.80.

Disparities in billing price per unit used in billing and amount stated in sales invoice stood at $11,973,828.48 and discrepancies on the Amount Transferred to the Federation Account in the five year period stood at N663.8 billion, Oke noted, adding that a lot of companies are enjoying undue tax waivers as the country’s lax regulations and monitoring allow for infractions in the face of borrowing.  

He noted that there was non production of complete information on Allocation of Crude Oil to Refineries in 2019; non-adherence to payment of all revenues to Federation Account while pumped products from refineries without evidence of receipt at depot stood at N7 billion.

“As at today, Saudi-Aramco is the largest company on the planet in terms of revenue with about $2.332 trillion, ahead of Apple, Tesla, Alphabet, Microsoft and Amazon. The technology companies have dominated this space for a long while and we have not seen any oil and gas company making the list of top 10. 

“Nigeria, as a country, has similar potential as Saudi Arabia, however, as at 2022, GDP Per Capita for Nigeria is $5,000, while that of Saudi Arabia is $24,224. The media has been reporting since the first quarter of 2022 that NNPC was failing in its ability to make remittance to the Federation Account, despite the current rise in price of crude oil.”

Funded by the U.S. government, the GIFT programme is aimed at catalysing reforms around Transparency, Accountability and Good Governance (TAGG) as it relates to the extractive sector of the country.

Oke lamented that most of government entities and corporations were not ready to subject themselves to scrutiny by the relevant public sector accounting authorities like the Office of the Auditor General for the Federation and even the National Assembly.

According to him, the agencies have at many times shunned invitation by committees in the National Assembly or used excuses to avoid attending public hearings.

Executive Chairman, Fiscal Responsibility Commission (FRC), Victor Muruako, who also spoke at the event, said payment of Operating Surplus has added great value to governance through generation of independent revenue to government, noting that the commission has caused over N1.7 trillion to be remitted to the FG’s Consolidated Revenue Fund (CRF), even with all the lapses in the Act.

Executive Secretary of the Nigeria Extractive Industries Transparency Initiative (NEITI), Dr. Orji Ogbonnaya, recalled that the agency had raised an alarm that companies in the oil and gas sector owe government over N2. 6 trillion in unpaid taxes and other levies in 2019, stressing the need to close the gap in remittances. 

He said there was need to support government in generating the needed revenues from the extractive sector that would be deployed to provide and upgrade existing infrastructure for citizens. 

“Let me use this opportunity to announce to you that conduct of the NEITI 2020 industry reports for the oil, gas and solid minerals sector, as well as the Fiscal Allocation and Statutory Disbursement (FASD) have all commenced. The project has been approved by NEITI National Stakeholders Working Group (NSWG) and is commencing with a nationwide data gathering, site visitation and mapping process.

“These activities are all geared towards deepening the scope of our reports. We are hopeful that this project will be concluded before the end of the year. NEITI has also fully automated its data gathering process, which will be deployed for the conduct of the 2021 audit. 

“Since we are using the automation technology for the first time, NEITI will deploy it alongside the manual data gathering technique that we have used in the past to ensure that there are no gaps nor glitches during the conduct of the exercise. This will facilitate Nigeria’s readiness for the global Extractive Industries Transparency Initiative (EITI) validation early next year where we would be evaluated on how compliant the country is to the EITI standard,” he said.

For Executive Director, OrderPaper Advocacy Initiative (OAI), Oke Epia, it is not welcoming to read of the alert by the International Monetary Fund (IMF) that Nigeria may be spending 100 per cent of its revenues on debt servicing.  

According to him, such prospect signposts the grim reality where Nigeria’s rich natural resource endowments have turned in very little or no benefits to its citizens. He said there was need to amend the Fiscal Responsibility Act (2007).

For Epia, while the FRA, which came to life on July 30, 2007, was a bold move by the government of the day to instil fiscal discipline and prudence in public finance management, unfortunately, the regulation have loopholes which have been exploited for well over a decade by agents of state to undermine the noble intentions of the law. 

“These loopholes include lack of sanctions and inadequate funding, which have presented clear barriers to the implementation of the Operating Surplus measure. Available records show that the Commission has caused over N1.7 trillion to be remitted to the Consolidated Revenue Fund (CRF) since coming into operation despite the shortfalls in the Act. It is not hard to imagine how much more the government could have benefitted from an independent and empowered FRC,” he said. (The Guardian)

 


Source: News Express

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