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NEITI: 77 Oil Companies Owing Nigeria N2.659tn Unremitted Funds

As Nigeria continues to grapple with revenue shortfall and has gone borrowing to finance its huge budget deficit with debt service gulping as much as 98 per cent of its

As Nigeria continues to grapple with revenue shortfall and has gone borrowing to finance its huge budget deficit with debt service gulping as much as 98 per cent of its revenue, it has been revealed that 77 oil and gas companies operating in Nigeria are indebted to the country to the tune of N2.659 trillion.

This is just as the Nigerian National Petroleum Corporation (NNPC) is expected to once more make a huge deduction of N149.2 billion from the federation’s joint account when the Federation Account Allocation Committee (FAAC) meets next month, a document seen by THISDAY Tuesday revealed.

The Nigeria Extractive Industries Transparency Initiative (NEITI) which disclosed that 77 oil and gas companies were indebted to the federal government, attributed the debt to their failure to remit petroleum profit tax, company income tax, education tax, value added tax, withholding tax, royalty and concession on rentals.

Speaking in Abuja during an interaction with the media on the status of the Extractive Industries Transparency Initiative (EITI) implementation in Nigeria, the Executive Secretary of the organisation, Dr. Ogbonnaya Orji, stated that when converted to dollar, the government was being owed $6.48 billion at today’s official exchange rate of N410.35.

He noted that a breakdown of the figures showed that a total of $143.99 million was owed as petroleum profit taxes, $1.089 billion as company income taxes and $201.69 million as education tax. According to him, others included $18.46 million and £972,000 as VAT,  $23.91 million and £997,000 as withholding tax, $4.357 billion as royalty oil, $292.44 million as royalty gas, while $270.187 million and $41.86 million were unremitted gas flare penalties and concession rentals respectively.

In view of the government’s current search for revenues to address citizens’ demand for steady power, access to good roads, quality education, fighting insurgency and creating of job opportunities for the country’s teeming youths, Orji stressed that the monies needed to be recovered.

An analysis of what the sum of N2.65 trillion could contribute to economic development, he said, showed that it could cover the entire capital budget of the federal government in 2020 or even service the federal government’s debt of $2.68 billion in 2020.

“In 2021, if the money is recovered, the N2.659 trillion, it could fund about 46 per cent of Nigeria’s 2021 budget deficit of N5.6 trillion and is even higher than the entire projected oil revenue for 2021.

“This is why NEITI is set to work with the government to provide relevant information and data to support efforts at recovering this money.

“The disclosure of this information is in line with NEITI’s mandate to conduct audits, disseminate the findings to the public to enable the citizen’s, especially the media and civil society to use the information and data to hold government, companies and even society to account.

“It is important that the process of recovering this humongous sum be set on course to support government in this period of dwindling revenues,” the NEITI helmsman said.

 The executive secretary called on the companies to ensure that they remit the various outstanding sums against them before the conclusion of the 2020 NEITI audit cycle to the relevant government agencies responsible for collection and remittances of such revenue.

“NEITI will no longer watch while these debts continue to remain in its reports unaddressed. We will provide all necessary information and data to sister agencies whose responsibilities are to recover these debts into government coffers. We will do also share the information and data with our partner anti-corruption agencies with whom we have signed MoUs,” he added.

Within the short period the new management was appointed, Orji disclosed that his team had succeeded in ensuring the reconstitution and inauguration of the NEITI board and commencement of process of reviewing of NEITI Act to strengthen its powers and functions. In addition, he listed the timely publication and presentation of the reports; securing permanent office accommodation for the agency after 17 years of squatting on rent; sustained and diversified partnerships with key stakeholders and partners as part of the initiative’s achievement.

According to him, the appointment of NEITI into the implementation of the Petroleum Industry Act (PIA); commencement of the development of a five-year NEITI strategic plan (2022-2026); NEITI audit automation project and Nigeria’s involvement in opening extractives programme, were further modest strides made by the organisation.

He stated that NEITI’s had further been appointed to lead the global EITI contract transparency network; designing of a new, functional and interactive website and reconstitution of the civil society and communication sub-committee, among others.

Earlier in his welcome remarks, the Chairman of the NEITI board, Mr. Olusegun Adekunle, assured that a lot more needed to be done in the EITI implementation in Nigeria, especially under the new PIA regime.  He maintained that the solid minerals sector was begging for coordination, noting that the civil society and the media, being the third leg of the EITI tripod have critical roles to play in the Initiative.

“To effectively undertake this task of ensuring prudent management of extractive resources, there is need for effective oversight of the implementation of the EITI standard by all relevant frontline agencies of government and companies.

“NSWG looks up to you for you to effectively monitor these guidelines and to ensure that the standards are mainstreamed in the covered entities’ daily operations”, he said.

He reiterated the commitment of President Muhammadu-led administration to EITI implementation in Nigeria, noting that the administration was passionate about the EITI process.

The chairman assured members of the civil society and the media that the NEITI board under his watch would do all within its power to sustain the existing partnership and ensure a more robust and cordial relationship with civil society groups.

In his goodwill message, the Programme Manager, British Council/ Rule of Law and Anti-Corruption Programme (RoLAC), Mr. Emanuel Uche, commended NEITI under the current management for the modest achievements made within a short period.

Emmanuel Addeh in Abuja