A total of 77 oil and gas companies operating in Nigeria are still indebted to the federation about $2.659 trillion Naira, the Nigeria Extractive Industries Transparency Initiative (NEITI) said on Tuesday.
The Executive Secretary of the NEITI, Orji Ogbonnaya Orji who disclosed during a media briefing in Abuja said the debt arose from failure of the companies to remit to the relevant government agencies their petroleum profit tax (PPT), company income tax (CIT), education tax (EDT) , value added tax (VAT), withholding tax (WTH), royalty and concession on rentals.
Orji was presenting the status report on the EITI implementation in Nigeria during the agencies mid-year briefing and presentation of the agency’s scorecard in the past seven months.
He said total liabilities of the 77 companies were covered by the 2019 NEITI independent oil and gas audit process, whose report published recently.
“The NEITI reports based on findings in its 2019 audit reports of the oil and gas sector showed that oil and gas companies in Nigeria owe the Federal government about $6.48billion, or about N2.659trillion) at today’s exchange rate of N410.35.
A breakdown of the figures, Orji said showed a total of $143.99million was owed as PPT; $1.089billion as CIT, and $201.69million as EDT, while others covered about $18.46million and £972,000 as VAT.
Also, about $23.91million and £997, 000 as Withholding Tax, $4.357billion as oil royalty, $292.44million as royalty gas, while $270.187million and $41.86million were unremitted gas flare penalties and concession rentals respectively.
The disclosures, Orji said, were important and timely in view of the government’s current search for revenues to meet various funding requirements to fix key infrastructure for steady power, access to good roads, quality education, fight insurgency and creation of job opportunities for the country’s teeming youths.
On what N2.65trillion could contribute to economic development if recovered, Orji said it could be of immense value for the implementation of this year’s budget, as it could take care of the entire project capital budget of the federal government in 2020, or even debt service obligation of $2.68billion.
Explaining further, Orji noted: “In 2021, if the money is recovered the N2.659trillion could fund about 46% of Nigeria’s 2021 budget deficit of N5.6Trillion, which is even higher than the entire projected oil revenue for 2021.”
He said NEITI was determined to work with the government by providing relevant information and data to support the recovery of the money.
The disclosure of these information, he said, was in line with NEITI’s mandate to conduct audits, disseminate the findings to the public, to enable citizens, especially the media and civil society 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 Executive Secretary said.
In furtherance of its mandate, he said NEITI’s current focus was “Relevance Built on Revenue Growth and Impact”, to help government recover the money.
“We therefore appeal to these companies to ensure 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 to the Federation Account.
“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,” Orji warned.
“We will also share the information and data with our partner anti-corruption agencies with whom we have signed MoUs to pursue and recover these monies for the government,” he added.
On NEITI’s achievements in the last seven months, Orji said they include the re-constitution and inauguration of the NEITI Board; commencement of process of reviewing of NEITI Act to strengthen its powers and functions; timely publication and presentation of the reports; securing permanent office accommodation for the agency after 17 years of squatting; sustaining and diversifying partnerships with key stakeholders and partners.
Other achievements included the appointment of NEITI into the implementation of the Petroleum Industry Act (PIA); commencement of the development of a 5-year NEITI Strategic Plan (2022-2026); NEITI Audit Automation Project; Nigeria’s involvement in Opening Extractives programme; NEITI’s appointment 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.
He said following the recent publication of the 2019 audit report, NEITI has already set to commence the 2020 audit, while the procurement process towards the 2021 would soon start in line with its commitment to ensure timely completion and release of audit reports.
The Chairman of the NEITI Board, Olusegun Adekunle noted the achievements recorded so far and assured that a lot more needs to be done in the EITI implementation in Nigeria, especially under a new PIA regime.
He noted the performance of the solid minerals sector, which was still begging for coordination, adding that the civil society and the media, as the third leg of the EITI tripod, has 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 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 Buhari-led administration to EITI implementation in Nigeria, noting that the government was passionate about the EITI process, which is serving two key agenda on strategic economic development through extractive sector, and achieving transparency and accountability in the management of the nation’s natural resources under the anti-corruption agenda.
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