REVEALED: Despite Borrowing, Four Agencies Generate N28.02tr In Three Years

Save Our Nation (SON)

April 29, 2022

At a time Nigeria is borrowing heavily, revenue by four Federal Government agencies generated N28.02 trillion between 2017 and 2019.

Although the revenue is shared with states and local councils, at the same period, the country’s budget stood at N25 trillion, with appropriation being N7.3 trillion in 2017, N9.12 trillion in 2018 and N8.92 trillion in 2019.

Currently, there are already indications that Nigeria’s borrowing plans could push public debt stock to N50.22 trillion by 2023 when the tenure of President Muhammadu Buhari is due to end.

While there are more revenue sources for the Federal Government, the combination of Nigerian National Petroleum Company (NNPC), Federal Inland Revenue Services (FIRS), Department of Petroleum Resources (DPR) – now Nigeria Upstream Petroleum Regulatory Commission (NUPRC) – and Ministry of Mines and Steel Development (MMSD) alone generated $28.02 trillion for the government.

A report, released, yesterday, by Nigeria Extractive Industries Transparency Initiative (NEITI) showed that only N22.68 trillion got into government account, even as minerals and non-minerals revenue contributed N12.84 trillion (56.61 per cent) and N6.57 trillion (28.97 per cent), while Value Added Tax (VAT) accounted for N3.27 trillion (14.42 per cent).

The deduction by the four agencies is reportedly spent on cost of collection and Joint Venture (JV) cash calls.

NEITI, in the Fiscal Allocation and Statutory Disbursement (FASD) for 2017-2019, which examined total extractive industry revenue remitted into the Federation Account, revealed that FIRS generated N13.48 trillion within the period under review with Petroleum Profit Tax (PPT) accounting for N5.80 trillion (43.09 per cent) while VAT and other taxes accounted for 32 per cent and 24 per cent.

The report noted that the service sector recorded highest revenue collection of N5.02 trillion in 2018.

It disclosed that N8.82 trillion was generated by NNPC within the period.

Breakdown shows that N4.55 trillion came from domestic crude sales, while export receipts accounted for N4.27 trillion. It further disclosed that N5.33 trillion was deducted at source for JV cash call and others, leaving the net amount of N3.49 trillion as transferred to Federation Account.

“During the period under consideration, N8.82 trillion was generated. However, only N3.49 trillion (39.55 per cent) was remitted to the Federation Account due to deductions at source by NNPC for JV cash calls. The deductions at source by NNPC negate the principle of Federation Account,” NEITI’s report stated.

From the report, DPR (now NUPRC) generated N3.53 trillion for the three years under review, with royalty payments accounting for N3.40 trillion (96.41 per cent).

The agency however transferred N3.53 trillion to the Federation Account. The audit established that the surplus of N6.72 billion was as a result of unremitted receipts from previous year.

Ministry of Mines and Steel Development (MMSD) generated N12.498 billion within the three years period. Breakdown shows that Mining Inspectorate Department (MID) contributed N6.43 billion, while Mining Cadastral Office (MCO) accounted for N6.06 billion.

According to the report, from the total revenue generated by the ministry, N7.56 billion was shared to the three tiers of government in 2019.

On the NDDC, NEITI’s report revealed that the commission generated N755.96 billion within the period under consideration.

Breakdown shows that N551.08 billion (73 per cent) was contributed by oil and gas companies, while the balance of N203.90 billion (27 per cent) was Federal Government’s contribution to the commission.

The report further revealed that the total expenditure by the commission during the period under review was N882.3 billion. Analysis of the expenditure shows that N778.29 billion (88.20 per cent) was expended on development projects, while operational cost accounted for N104.07 billion (11.80 per cent) of the total.

Analysis of project execution in member states ranks Delta State highest with a total expenditure of N40.46 billion (26 per cent). Edo received the lowest development projects of about five per cent.

NEITI audit established that there was a gap between actual development projects expenditure as per audited financial statements and project monitoring list provided by the commission in the sum of N522.60 billion.

“While N679 billion was reported in NDDC’s financial statement, the project monitoring list reported expenditure of N157 billion on physical projects among the nine member states,” the report revealed.