Oil
NNPC, others flout FRA, divert N8.8 trillion
ABUJA – The Nigeria National Petroleum Corporation and some other agencies have been accused of gross violation of the Fiscal Responsibility Act, FRA, and directives of the ministry of finance between 2007 – 2011, while also diverting the sum of N8.8 trillion.
This is contained in a report of the House of Representatives.
Other agencies fingered by the report include; subsidiaries of the NNPC, Nigerian Communications Commission, NCC, the Federal Capital Territory, FCT, Federal Airports Authority of Nigeria, FAAN, Nigerian Maritime Administration and Safety Agency, NIMASA, Nigerian Ports Authority, NPA, Nigerian Broadcasting Commission, NBC, and the Federal Mortgage Bank, FMBN, among others.
Even though the agencies collectively generated N9.3trillion, only N174.9bilion was remitted to the treasury between 2009 – 2012 the House report disclosed.
The FRA allows agencies to remit to the Treasury based on their annual operating surplus framework. The Finance ministry’s directive requested them to remit 25 per cent of their gross collection to the Treasury.
Independent revenue derived from Internally Generated revenue (IGR), is 100 percent dedicated to the Federal Government – to the exclusion of other tiers of government.
The agencies were supposed to have remitted N3.06trillion generated in 2009 as independent revenue, but they sent in N46.8billion or 1.53 percent to the Treasury.
The report also revealed that in 2010, the agencies generated N3.07trillion, but remitted N54.1bilion or 1.76 percent to the Federal Government.
In 2011, N3.17trillion was generated, but only 2.33 per cent or N73.8b was remitted to the Treasury.
NNPC and its subsidiaries generated N6.1trillion (excluding proceeds from crude oil and gas) during the period but remitted nothing to the Federal Government.
A general analysis of the agencies’ submission (excluding the NNPC’s) shows expected remittance of N189billion as at October, last year.
Only N80bilion had been paid to the Treasury (42 per cent compliance), leaving a shortfall of N109billion.
With the exception of the Central Bank of Nigeria (CBN), all the agencies prepared and submitted their audited accounts to the office of the Auditor General outside the time stipulated in the Fiscal Responsibility Act, 2007.
The report of the House Committed on Finance on independent revenue generation and remittances to the Consolidated Revenue Fund by government-owned agencies that was considered yesterday by the lawmakers, however, praised five agencies for attempting to adhere to the FRA to some extent by regularly remitting their independent revenues to the Federal Government.
These are: CBN, Federal Radio Corporation of Nigeria (FRCN), Nigerian Television Authority (NTA) and two others.
Abdulmumin Jubrin, chairman of the committee presenting the report, said between 2009 and 2011, the NNPC and all its subsidiaries generated N6.132trillion as Internally Generated Revenue (IGR), but remitted no part of it to the Federal Government.
According to him, the money excluded what was generated from crude oil and gas sales.
The report also revealed that the Federal Inland Revenue Service (FIRS) provided confusing accounting figures of its independent revenue in 2009.
While N5.6m was declared, when the agency’s audited account was reviewed, another sub-head of N323m was discovered.
According to the committee’s findings and in consonance with the submission of the Fiscal Responsibility Commission (FRC), most of the reviewed agencies were found culpable of not adequately making returns to the Treasury as well as also preparing different sets of account.
The agencies were found to have always prepared one account for the FRC and another for the Auditor General’s office.
The lawmakers, in adopting the recommendations of the report, mandated the Finance Committee to work on the Fiscal Responsibility Act (FRA) 2007 within four weeks so as to check various loopholes that enable government agencies spend what they generate without recourse to the National Assembly.
The Committee on Finance is to probe other agencies that were not captured in this exercise to ascertain their status.
“Agencies that have refused to cooperate with the committee are to do so within seven days or Section 89 of the constitution will be invoked on them.
The other recommendations are that: The Ministry of Finance should compel agencies which have outstanding balances to be paid to pay up immediately;
•Any agency found to be spending outside budgetary provisions should be punished;
•All revenues due to the Consolidated Revenue Fund of the Federal government must be paid as and when due;
•The Accountant General of the Federation should submit to the Committee a detailed monthly report of remittances of Federal Government independent revenue;
•The FRC should sanction any agency that fails to submit its audited annual account as and when due;
• All agencies should henceforth present evidence of remittances into the Consolidated Revenue Account to the relevant Committees of the House during their budget performance defence; and
• The Federal Ministry of Finance should immediately ensure that all funds hidden in various agencies’ bank accounts should be mopped up and promptly remitted to the Consolidated Revenue Fund and report to the Finance Committee within three months”.
The shortfall of remittances of some of the agencies are: Nigerian National Petroleum Corporation (NNPC)-N6.1trillion; Federal Capital Territory (FCT)-N7.7b; Central Bank of Nigeria (CBN-N45.5b; Federal Airport Authority of Nigeria (FAAN)-N6.9b; Nigerian Maritime Administration and Safety Agency (NIMASA)-N1.4b; National Agency for Food, Drug Administration and Control (NAFDAC)-N1b; Nigerian Port Authority (NPA)-N11.1b; Nigerian Communications Commission (NCC)-N3.3b; Nigerian Broadcasting Commission (NBC)-N211.7m; Federal Mortgage Bank (FMBN)-N300.4m; West African Examination Council (WAEC)-N2.5b; National Sports Commission (NSC)-N3.7m; Standards Organization of Nigeria (SON)-N252.7m; Federal Road Safety Commission (FRSC)-N410.9m; Federal Housing Authority (FHA)-N221.2m;
Nigeria Shippers Council-N6.4m; Nigeria Deposit Insurance Corporation (NDIC)-N8.8b; Nigerian Airspace Management Agency (NAMA)N3.6b; Industrial Training Fund (ITF)-N4b; Corporate Affairs Commission. (CAC)-N2b; Bank of Industry (BoI)-N3b; and Joint Admissions and Matriculation Board (JAMB)-N1.4b.
In a strategic move to revitalize Nigeria’s oil and gas sector, the Federal Government has unveiled two key fiscal incentives aimed at attracting investment and enhancing energy security.
The announcement was made by Mr. Wale Edun, the Minister of Finance and Coordinating Minister of the Economy on Wednesday.
The first initiative, the Value Added Tax (VAT) Modification Order 2024, introduces critical exemptions for essential energy products and infrastructure, including Diesel, Feed Gas, Liquefied Petroleum Gas (LPG), Compressed Natural Gas (CNG), Electric Vehicles, Liquefied Natural Gas (LNG) infrastructure, and Clean Cooking Equipment.
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These exemptions are designed to reduce living costs for Nigerians, promote energy security, and accelerate the transition to cleaner energy alternatives.
The second initiative, the Notice of Tax Incentives for Deep Offshore Oil & Gas Production, offers new tax relief options for deep offshore exploration projects.
This measure aims to position Nigeria’s deep offshore basin as a premier destination for international oil and gas investments, boosting the country’s appeal to foreign investors.
These reforms are part of a broader set of policy initiatives, known as Policy Directives 40-42, endorsed by President Bola Ahmed Tinubu.
The directives reflect the administration’s commitment to fostering sustainable development in the energy sector and enhancing Nigeria’s competitive edge in the global oil and gas market.
By Yemie Adeoye
NIGERIA’s President Bola Tinubu has announced that the protracted ExxonMobil-Seplat upstream oil divestment will be formally approved by the Minister of petroleum within a matter of days, just as he announced his government’s intention to expand the Compress natural Gas, CNG buses initiative.
The President who stated this during his Independence day nationwide broadcast stated that the move is in line with his administration’s commitment to free enterprise, free entry and free exit in investments which is the hallmark of his administration investment policy.
“Fellow compatriots, our administration is committed to free enterprise, free entry, and free exit in investments while maintaining the sanctity and efficacy of our regulatory processes. This principle guides the divestment transactions in our upstream petroleum sector, where we are committed to changing the fortune positively. As such, the ExxonMobil Seplat divestment will receive ministerial approval in a matter of days, having been concluded by the regulator, NUPRC, in line with the Petroleum Industry Act, PIA. This was done in the same manner as other qualified divestments approved in the sector.”
The President also seized the opportunity to plead with Nigerians to be patient with his administration’s reform policies. “As your President, I assure you that we are committed to finding sustainable solutions to alleviate the suffering of our citizens. Once again, I plead for your patience as the reforms we are implementing show positive signs, and we are beginning to see light at the end of the tunnel”.
“Our energy transition programme is on course. We are expanding the adoption of the Presidential Initiative on Compressed Natural Gas for mass transit with private sector players. The Federal Government is ready to assist the thirty-six States and FCT in acquiring CNG buses for cheaper public transportation.
Fellow Nigerians, while we are working to stabilise the economy and secure the country, we also seek to foster national unity and build social harmony and cohesion. Our economy can only thrive when there is peace”. he enthused.
As part of the administration’s push to improve Ease of Doing Business (EoDB), Nigeria’s Vice President Kashim Shettima has expressed support for ExxonMobil’s plan to invest $10 billion in the country’s deep-water oil sector.
Speaking on Wednesday, September 25, 2024, during a meeting with ExxonMobil executives at the 79th United Nations General Assembly (UNGA) in New York, Shettima called the investment “a clear testament to the administration’s economic reforms and investor-friendly policies.”
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This announcement follows news that international maritime company DP World intends to develop a multibillion-dollar port project in Nigeria.
Stanley Nkwocha, Senior Special Assistant to the President on Media and Communications, shared the development in a statement on Wednesday. He quoted Shettima as saying: “ExxonMobil’s potential investment aligns with the vision of President Bola Ahmed Tinubu’s administration for a more investment-friendly Nigeria.
We are committed to fostering an environment that supports such transformative projects.”Shettima also discussed the administration’s broader efforts to improve the ease of doing business, highlighting the “Renewed Hope Agenda,” which aims to simplify bureaucratic processes, enhance transparency, and offer fiscal incentives to attract global investors.
“Our administration has taken bold steps to unify the exchange rate, remove fuel subsidies, and implement tax reforms. These measures, though challenging in the short term, are intended to create a stable and predictable business environment in the long term,” he added.
On the oil and gas sector, Shettima mentioned that the government is revising the fiscal framework for deep-water operations to attract investment while ensuring fair returns for the Nigerian people.
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