Stakeholders Deplore Nigeria’s Inability to Benefit from High Oil Prices

Stakeholders in the public finance accountability space in Nigeria on Thursday bemoaned the inability of the country to benefit from the exploitation of its natural resources, especially with skyrocketing oil and gas prices.

Speaking at a forum held under the auspices of the Growth Initiatives for Fiscal Transparency (GIFT) implemented by OrderPaper Advocacy Initiative, Chairman of the House of Representatives Committee on Public Accounts, Wole Oke, stated that despite several audit queries, billions of dollars remain unremitted to the consolidated account.

Other cluster partners for the programme include: The Centre for Transparency Advocacy (CTA), HipCity Innovation Centre, CLICE Foundation and Nigeria Institute of Quantity Surveyors (NIQS) with support from the United States Agency for International Development (USAID).

Tagged “Revenue, Remittance and Resource Beneficiation”, Oke noted that while many countries with oil endowments have been able to utilise the resources for the benefit of their citizens, Nigeria has not been able to do so.

Today he said, Saudi-Aramco has emerged the largest company on the planet in terms of revenue with about $2.332 trillion, ahead of Apple, Tesla, Alphabet, Microsoft and Amazon.

He lamented that although Nigeria has similar potential as Saudi Arabia however, as at 2022, its Gross Domestic Product (GDP) per capita is 5,000 USD, while that of Saudi Arabia is $24, 224.

Oke said that while other nations were making progress, since the first quarter of 2022, NNPC has failed to make remittance to the Federation Account despite the current rise in price of crude oil, describing it as depressing.

Between 2014 and 2019, he stated that the audit queries raised by the Auditor General of the Federation on the Nigerian National Petroleum Company (NNPC) included delayed payments by customers without evidence of any surcharge for the delays, amounting to $510,020,921.79.

The chair of the public accounts committee listed incomplete payments by customers as amounting to $ 6,203,863.68; outstanding payments by customers $80,452,746.83 while transfer to undisclosed escrow account was $235,685,861.31.

In addition he stated that other funds which were unaccounted for were the unexplained shortfall on NLNG balances which he put at $18,389,334.23 and payment for gas exports through NGL Funding Account instead of the Federation Account amounting to $ 346,211,227.59.

He listed others as “Unexplained and unsubstantiated foreign exchange losses on sums paid into the Federation Account – $ 2,664,047.64; Gas sales without payment status, payment details or payment confirmation – $ 9,389,105.80 and disparities in billing price per unit used in billing and amount stated in sales invoice – $11,973,828.48.

Furthermore, he mentioned that discrepancies in the amount transferred to the Federation Account was N663,896,567,227.58 while pumped products from refineries without evidence of receipts at depot was N7,056,137,180.00.

“ To compound these problems, most of these government entities and corporations are not even ready to subject themselves to scrutiny by the relevant public sector accounting authorities,” he stated.

In his comments, the Executive Chairman, Fiscal Responsibility Commission (FRC), Victor Muruako, said the Act has helped to reduce financial indiscipline and has led to a remarkable improvement in the area of fiscal management, especially as regards public expenditure, revenue collection, savings and transparency in fiscal activities.

“Payment of operating surplus is one aspect of the mandates of the Commission that has added great value to governance through generation of independent revenue to government. Notably, the commission has caused over N1.7 trillion to be remitted to the Consolidated Revenue Fund (CRF) even with all the lapses in the Act.

“Therefore, being a key agency of the Federal Government emplaced with salient responsibilities in the management of the country’s fiscal health and wellbeing, the commission is naturally at the forefront of efforts to reverse the tide of the revenue crisis,” he stated.

He noted that it was the reason within its available means and despite statutory limitations, the FRC had bent over and stretched its resources to support all efforts to flag and prevent fiscal rascality, promote fiscal responsibility and block leakages.

Executive Director, OrderPaper, Oke Epia, in his remarks, noted that the alert by the International Monetary Fund (IMF) that Nigeria may be spending 100 per cent of her revenues on debt servicing soon was concerning.

He called for the amendment of the Fiscal Responsibility Act (2007) as a major item, stressing that there were certain loopholes which have been exploited for 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 designed by the current FRC,” he said.

“It is not hard to imagine how much more the government could have benefitted from an independent and empowered FRC,” he argued.

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