Squandering Of $67b Reserves: Ezekwesili Hits Back

The Guardian
BY MARCEL MBAMALU NEWS -NATIONAL

• Renews Call For Public Debate

• Insists On Transparency

AMID denials and counter-allegations, former Vice President of the World Bank, Ms. Obiageli Kathryn Ezekwesili, has renewed her charge of government frittering $67 billion reserves, including accruals to the Excess Crude Account (ECA), in the last six years.

She maintained that her call for accountability and transparency in government business could be addressed in a public debate to ascertain the true position of public finances she had highlighted.

Ezekwesili, who, in an email exchange with The Guardian, declined invitation for an exclusive interview on the matter, urged relevant officials of the Federal Government to accept her offer, as doing so would be in its interest and that of the generality of Nigerians.

She, however, expressed the hope that government would, in the end, respond positively to her right, as citizen, to demand accountability in a democracy.

“Thanks for you kind invitation,” she wrote in the electronic mail. “I am, however, unable to grant any interviews at this time.

“As you know, I have already asked for a public debate with the relevant representatives of the Federal Government.

“I however, continue to hope that the Federal Government will in the end respond positively to my right, as a citizen, to demand for public accountability in a democracy.”

She said that if the Federal Government accepted to participate in the public debate on the way it had managed oil revenues in the last nearly six years, “I have no doubt that it would be beneficial to all citizens,” enhancing our “right to know” how public resources and institutions are managed .

The former Minister of Solid Minerals, and Education during the Obasanjo administration before moving back to the World Bank as Vice President for the Africa region in 2007, had delivered a Lecture at the 42nd Convocation Ceremony of the University of Nigeria, Nsukka (UNN) two weeks ago.

In the lecture entitled, ‘The Wealth And Poverty Of A Nation: Who Will Restore The Dignity Of Nigeria?’, she raised issues with the manner the Yar’Adua and Jonathan governments had managed the nation’s foreign reserves left by the Obasanjo administration.

She alleged that the regimes mismanaged $45 billion in Foreign Reserves and $22 billion in Excess Crude Account, which they inherited from the Obasanjo administration in 2007.

Ezekwesili, who referred to the squandering of the nation’s resources by the elite, said the present cycle of boom of the 2010s was, however, much more vexing than the other four that happened in the 70s, 80s, 90s and 2000s.

“This is because, we are still caught up in it even as I speak today and it is more egregious than the other periods in revealing that we learned absolutely nothing from the previous massive failures,” she said.

“Furthermore, it is happening back to back with the squandering of the significant sum of $45 billion in foreign reserve account and another $22 billion in the Excess Crude Account being direct savings from increased earnings from oil that the Obasanjo administration handed over to the successor government in 2007.

“Six years after the administration I served handed over such humongous national wealth to another one; most Nigerians, but especially the poor, continue to suffer the effects of failing public health and education systems as well as decrepit infrastructure and battered institutions.”

She continued: “One cannot but ask, what exactly does symbolise with this level of brazen misappropriation of public resources? Where did all that money go?

“Where is the accountability for the use of both these resources plus the additional several hundred dollars realised from oil sale by the two administrations that have governed our nation in the last five years? How were these resources applied or more appropriately misapplied? Tragic choices! Yes.”

Government’s response to Ezekwesili’s UNN’s Convocation Lecture was swift and fiery.

Information Minister, Labaran Maku, argued that, after the administration of Obasanjo, the reserves had risen from $43.13 billion, in May 2007, to $62 billion, in September 2008.

According to him, when oil prices fell from $147 per barrel to $31.7 in September 2011, and against the backdrop of the global financial crisis, the Central Bank of Nigeria had to intervene, to defend the value of the Naira.

Maku, who sign advertorials countering the former minister’s charge, said the excess crude savings, a component of the reserves, was then used to stimulate the economy to the tune of about $1 billion.

But the former World Bank topnotch, while responding to a request for an email exchange on the matter, said: “Unlike a bilateral interview of the kind you request, a public debate is not one-sided and would be extremely useful to the Federal Government and its officials, who have so far refused to engage on the substance of issues I raised in my Convocation speech at the University of Nigeria.

“Such debate would help reassure that the Federal Government is not narrowing the governance space with disturbing signs of intolerance for citizens’ voice, considering the manner it has so far conducted its reaction to my speech.

“Again, thanks for reaching out. Blessings always.”

Next >

Obama, Cameron, G8 Leaders To Discuss Nigeria’s Controversial Oil Wealth Wastage

The Guardian

FROM LAOLU AKANDE, NEWS YORK

NIGERIA’S controversial management of its stupendous oil wealth over the years would form one of the important themes of discussion for G-8 leaders in June, when they meet in Northern Ireland in the United Kingdom, according to diplomatic sources.

Already, the presidency of the summit for this year under United Kingdom is currently reaching out to other G-8 leaders and an international consensus is said to be quietly formed to demand transparency from leaders and governments of developing countries, whose huge resources and wealth are being frittered away.

International donors, including private foundations and agencies, are also concerned about the perception of increasing wealth but decreasing living standards of the people.

For instance, US Billionaire, Bill Gates, in an interview during the week, said, “Nigeria really needs to think that, relative to its level of wealth, it is really far behind...”

The G8 Summit, which holds annually, is a gathering of presidents and prime ministers of the top eight advanced economies of the world — the US, UK, Germany, France, Canada, Italy, Japan and Russia.

The Summit, which normally holds about the mid-year and focuses on global economy and socio-political issues, is presided over in turns by its eight-member-countries.

For 2013, UK holds the presidency and Prime Minister David Cameron is said to be forming the issues the summit should focus on this year.

Sources said before Prime Minister Cameron’s speech last week in Davos, where he made mention of Nigeria’s oil wealth and its management, he had intimated other G-8 leaders of the need for an agenda that brings such issues of financial accountability and transparency to the fore in a country like Nigeria.

A January 2 letter written by the British Prime Minister to all G-8 leaders, including US President Barack Obama, revealed that this year’s summit would stress trade advancement, tax compliance and transparency.

Nigeria’s example is said to be agitating the minds of the G8 leaders, just as there is controversy over the seeming squandering of past oil windfall.

After Cameroon wrote the other G8 leaders hinting on his intent to pursue the issue of transparency aggressively as president of the summit, he then proceeded early last week in Davos to publicly pin-point Nigeria as a case in point, where transparency issues have made some progress but corruption and mismanagement of huge oil wealth still continues to deny the nation’s people of their prosperity.

In a speech that has been so widely and globally received, Cameron said just last year alone “Nigeria oil exports were worth almost a hundred billion dollars. That is more than the total net aid to the whole of sub Saharan Africa. So put simply: unleashing the natural resources in these countries dwarfs anything aid can achieve, and transparency is absolutely critical to that end.”

He went on to say the G8, under his presidency, would be more aggressive on how governments of such countries like Nigeria spend the money from such huge returns, declaring that the western and Japan’s leaders are “going to push for more transparency on who owns companies; on who’s buying up land and for what purpose; on how governments spend their money; on how gas, oil and mining companies operate; and on who is hiding stolen assets and how we recover and return them.

“Like everything else in this G8, the ambitions are big and I make no apology for that.”

According to Cameron, who said he had no apology for his stance, “I want this G8 to lead a big push for transparency across the developing world, and to illustrate why. Let me give you one example. A few years back a transparency initiative exposed a huge hole in Nigeria’s finances, an $800 million discrepancy between what companies were paying and what the government was receiving for oil - a massive, massive gap.

The discovery of this is leading to new regulation of Nigeria’s oil sector so the richness of the earth can actually help to enrich the people of that country.

In fact, diplomats added that Cameron’s aggressive resolve, and his choice of Nigeria as an example, is making the rounds in western capitals and around the world, highlighting the Nigerian condition.

Nigerian Migrants Remitted $21bn Home in 2012

World Bank office

Paul Obi in London

Nigerians living abroad, who remitted $21 billion home last year, rank among citizens of the top five countries that remitted about $530 billion to their countries in 2012, showing a tremendous increase from the previous year.

In the latest ranking by the World Bank, India led the pack, followed by China, Philippines, Mexico and Nigeria in the fifth position.

Figures show that India and China received $60 billion from their citizens abroad, Philippines ($24 billion), Mexico ($24 billion), and Nigeria ($21 billion). Others who also joined the top 10 include Egypt, the sixth largest, with about $18 billion remittance last year, indicating an astronomical surge from $9 billion in 2008.  It is believed that the surge is perhaps driven by increased support by migrants to their families in the face of political uncertainty or savings brought by returning migrants.

The remittances of $530 billion last year by the migrants outstripped the World Bank’s projection for the period, which were expected to reach $406 billion in 2012, a growth of 6.5 per cent over the previous year. These flows are expected to rise to 8 per cent in 2013 and 10 per cent in 2014 to reach $534 billion in 2015.

Analysts believed the rise in remittances from Nigerians in the Diaspora is being done to enable them subscribe to a Diaspora bond being planned by the Ministry of Finance. Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, in September  2011, had announced in Washington the plans by the Federal Government to issue the Diaspora bond in a bid to secure alternative means of funding critical infrastructural projects in Nigeria.

A Diaspora bond is a debt instrument issued by a country or a private corporation to raise financing from its citizens in foreign countries.
However, the remittances come at a high cost to migrants from sub-Saharan Africa, which the World Bank identified as the most expensive region to send remittance to, with a transfer costing in the third quarter of 2012 about 12.4 per cent of the amount transferred. This is almost twice the corresponding figure of 6.5 per cent for South Asia.

According to the World Bank, the new figures for 2012 now surpassed the international community global aid for development, poverty reduction, healthcare and other strategic sectors.

Head of the World Bank Migration and Remittance Unit, Dilip Ratha, was quoted to have said that there is a likelihood of billions of some of the remittances not being documented as migrants might have channelled or transferred their funds through non-official means, to avoid documentation.

According to the World Bank, over 215 million people, about 3 per cent of the world's population, live outside their countries of birth. Remittances by them are considered three times the size of official development assistance and provide an important lifeline for millions of poor households in their countries.

The bank estimated that the migrants, if they were all to reside in a country, will be far bigger than most countries, even with the possibility of becoming the fifth most populous nation, following only China, India, America and Indonesia.

The United Kingdom, the United States of America, European countries and Asia nations are the top regions where most of the funds were remitted back home by migrants workers.

Tags: News, Nigeria, Featured, Nigerian Migrants, $21bn, HOME, 2012

Nigeria Earns N22.2 Trillion from Oil Sector in Three Years

 Finance Minister, Dr. Ngozi Okonjo Iweala

Chineme Okafor in Abuja with agency reports

An independent audit report of financial flows into the Federation Account from operations in the oil and gas sector has revealed that a total of N22.165 trillion ($143.5 billion) was earned as revenue from the sector from 2009 to 2011.

The audit, among others, revealed that the total accrual was four per cent short of the $148.8 billion earned by the country from the sector from 2006 to 2008.

The oil and gas industry audit, which was commissioned by the Nigeria Extractive Industries Transparency Initiative (NEITI) in line with its mandate for the period 2009 to 2011, was Thursday presented to the public in Abuja.

The audit, which was for the first time undertaken by an indigenous accounting and auditing firm, Sada Idris & Co, showed that proceeds from the sale of equity crude, royalty, signature bonus, concession rentals, gas flaring penalties, Petroleum Profit Tax (PPT) and companies’ income tax contributed to Nigeria’s earnings from the sector. The audit was concluded in nine months.

Other areas that contributed to these earnings included earnings from Pay As You Earn (PAYE), Value Added Tax (VAT), dividends and repayment of loans by the Nigerian Liquefied Natural Gas (NLNG), contributions to the Niger Delta Development Commission (NDDC) and the Education Tax Fund (ETF).

While presenting the audit report, Chairman of the National Stakeholders Working Group (NSWG) of NEITI, Mr. Ledum Mitee, said the financial audit had equally delved into the management of the controversial fuel subsidy scheme in which it discovered that the Nigerian National Petroleum Corporation (NNPC) had claimed a total of N1.40 trillion as subsidy payments directly from proceeds from domestic crude sales before remittance to the Federation Account.

Mitee stated that the report found out that subsidy payments claimed by the NNPC had increased by 110 per cent, that is, from its claims of N198 billion in 2009 and N416 billion in 2010 to N786 billion in 2011.

The report further showed that NNPC owed the federation N1.3 trillion from unremitted crude oil sales in the three-year period.  An NNPC spokeswoman said the firm could not comment on the findings because it had not seen the report yet, Reuters reported Thursday.

“From this report, the total financial flows to the Federation Account from the oil and gas sector from 2009 to 2011 were $143.5 billion. This amount is made up of proceeds from the sales of equity crude, royalty, signature bonus, concession rentals, gas flaring penalties, PPT and companies income tax.

“A breakdown of these earnings shows that sales of crude oil and gas within the period under review amounted to $81.9 billion and the total revenue that accrued to government from PPT, royalty, signature bonus, gas flaring penalties and concessional rentals amounted to $45.7 billion.

“Also, revenue from companies’ income tax, VAT and withholding tax within the two-year period amounted to $6.1 billion, while $4.8 billion was reported as revenue from dividends and repayments of loans by NLNG.

“From the report, the total revenue flow to states arising from withholding tax and PAYE was $1.5 billion, while the total revenue flow to other entities arising from the contributions to NDDC and ETF was $3.2 billion.

“The total financial flows represent a decrease of four per cent from what government earned in the sector in 2006-2008 when compared to total flows of $148.8 billion as against the reported government earnings of $143.5 for the period 2009-2011.

“The audit explained the decrease as largely due to adjustments in the applicable average oil price despite fairly consistent production volumes,” Mitee explained.

Another important revelation in the report is that financial flows from NLNG included dividends and repayment of loans of $4.84 billion and a further $3.99 billion from the liquefied natural producer received by NNPC.

The report confirmed that these amounts have neither been remitted to the CBN/NNPC JP Morgan account nor to the Federation Account.

On the subsidy payment claims made by the NNPC, Mitee said: “The financial report clearly underlines that contrary to the practice where subsidy payments are claimed from the Petroleum Support Fund (PSF) through the PPPRA by all qualifying oil marketing companies, NNPC draws subsidy payments directly from domestic crude sales proceeds before remittance to the Federation Account.

“As a result, a sum of N1.40 trillion was claimed during the period by NNPC as oil subsidy payments.

“Subsidy payments claimed by NNPC increased by 110 per cent. For example, it rose from N198 billion in 2009 to N416 billion in 2010. In 2011 alone, it rose to N786 billion. The increase between 2009 and 2011 alone was 186 per cent.” 

Other highlights of the report, as explained by Mitee, included unresolved differences between what government received and what companies claimed they paid into government’s account which amounted to $68.4 million and $311.85 million respectively, as well as the loss of N98.3 billion from NNPC’s applied average conversion rate which differed from the annual average of the Central Bank of Nigeria (CBN) rate.

Mitee also disclosed that the quartet of Neconde Energy Ltd, Septa Energy Ltd, Energia Ltd and Emerald Energy Resources had refused the auditors access to their financial books, adding that the defaulting companies will face the appropriate sanctions in accordance with NEITI Act, 2007.

In a related development, Ecobank has predicted that the Nigerian oil and gas industry could face a difficult 2013 as shale oil in the US takes an increasing share of the North American market, reported the Financial Times Thursday.

The bank estimated that Nigerian crude oil exports to the US could fall by over a quarter this year, from 800,000 barrels per day (bpd) in 2012 to as low as 580,000bpd in 2013.

Already in January, there were signs of stress. Crude oil shipments from Nigeria have, Ecobank said, declined from 75 cargoes in January to a scheduled 59 in March, and there is an unsold overhang of 21 out of 65 February cargoes.

This is an unusual situation given that the cargoes contain Nigeria’s premium grades of sweet and light crude, which are usually very much in demand.

As Head of Energy Research at Ecobank, Rolake Akinkugbe, explained, refiners in Asia are increasingly capable of handling larger volumes of sour crude oil grades, while European refiners are facing pressure on their margins and seeking lower-priced inputs.

Neither are looking favourably upon Nigerian oil grades, which are priced at a substantial premium to the sour grades from the Middle East.

“Nigeria and other oil producers in West Africa had a window of opportunity during the Libya crisis when the country’s (Libya's) supply was taken off the market,” she said.

“There was a great switch to African crude grades, which partly accounts for their pricing premium at the moment,” she added.

Libyan oil is now coming back on stream, but the major problem for Nigerian crude is the soaring volumes of shale oil being produced in the US.

The US is still Nigeria’s biggest oil export destination, but the relationship can no longer be taken for granted.

“A decade ago” said Akinkugbe, “the industry thought that by 2015 around 25 per cent of America’s oil would come from West Africa, but now there’s a dramatic change in that picture. African governments need to look for alternatives destinations.”

In recent years, she said, producers in West Africa and the Gulf of Guinea have exported around 2mbpd of oil to North America, but this has fallen to around 1mbpd, with the slump in Nigerian exports to the US being particularly severe due to the steeper price of its crude.

Having accounted for 12 per cent of US crude imports in 2011, Nigeria’s share fell to 6 per cent in 2012.

Nigeria’s oil exports to the US, Ecobank said, have already slumped to 700,000 bpd from the 2012 average of 800,000 bpd, and that could fall as far as 580,000bpd in 2013 as US domestic oil producers add an expected 800,000 bpd of new capacity.

Tags: News, Nigeria, Featured, N22.2 Trillion, Oil Sector

Nigerian Farouk Lawan charged over $3m fuel scam 'bribe'

Farouk Lawan was taken into custody after being charged in court in Abuja over the $3m bribe

Continue reading the main story

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• President 'must act over fuel scam'
• Viewpoint: 'Nigeria Spring' here to stay
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The Nigerian MP who headed an inquiry which found that a fuel subsidy scam had cost the country $6.8bn (£4.2bn) has been charged with corruption.

Farouk Lawan is alleged to have collected $500,000 of a $3m bribe solicited from an oil tycoon to drop his company from the investigation.

The legislator pleaded not guilty in court and was taken into custody until a bail hearing on 8 February.

His supporters say he is being targeted by those implicated in his probe.

Nigeria is Africa's leading oil producer but has to import most of its fuel.

Last year, Mr Lawan chaired the House of Representative committee that produced the fuel scam report, accusing some of those who import fuel of massive corruption.

It called for a total overhaul of the oil ministry and for the prosecution of companies and some powerful individuals who had benefited from the swindle.

The investigation was set up in the wake of angry nationwide protests in January 2012 after the government tried to remove a fuel subsidy.

'Expose blackmail'

The oil billionaire, Femi Otedola, has alleged the lawmaker demanded the $3m bribe in order to have his company, Zenon, removed from a list of those involved in the scandal.

Part of that money was handed over and a video recording of the transaction was given to police, he said.

"You Farouk Lawan... in the course of your official duty corruptly asked for the sum of $3m for yourself from Femi Otedola... to afterwards show favour to Femi Otedola," Reuters news agency quotes the charges read out in the Abuja High Court.

Another member of Mr Lawan's parliamentary fuel subsidy committee, Emenalo Boniface, was also charged in court on Friday with corruption for accepting $120,000 of the $3m bribe from Mr Otedola.

Mr Lawan has said he accepted the money in order to expose blackmail and informed the committee and the anti-corruption agency, the Economic and Financial Crimes Commission (EFCC), about it.

But the committee's deputy leader says he was not informed and nor did he receive any of the money. The EFCC has not commented.

The initial fuel subsidy report said Zenon owed more than $1m to the government.

Legislators later voted to remove the firm from the final report.

Mr Otedola is a close ally of President Goodluck Jonathan and a major financier of the ruling People's Democratic Party.

The BBC's Bashir Abdullahi in Abuja says as it is illegal to give as well as take bribes in Nigeria, some people have asked why Mr Otedola is not also facing any legal action.

But if Mr Otedola was acting as part of a sting operation for Nigeria's intelligence agency, the State Security Services (SSS), as he has claimed, he will not be charged, but may be called as a witness, our reporter says.

The SSS has not commented.

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• Viewpoint: 'Nigeria Spring' here to stay
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NNPC took illegal N1.4tn fuel subsidy –NEITI

FEBRUARY 1, 2013 BY EVEREST AMAEFULE 12 COMMENTS

Chairman, NEITI, Mr. Ledum Mitee
| credits: newsdiaryonline.com

The Nigerian National Petroleum Corporation illegally paid itself the sum of N1.4tn between 2009 and 2011 as petrol subsidy, a  Nigerian Extractive Industry Transparency Initiative audit report for 2009 – 2011, has shown.

The highlights of the report presented by the Chairman of NEITI, Mr. Ledum Mitee, to journalists in Abuja, also showed that the NNPC owed the Federation Account  a whopping  N1.3tn.

Further, the report showed that the corporation which is the custodian of the nation’s oil resources, received $4.48bn from the Nigerian Liquefied Natural Gas which it has yet to remit  to the Federation Account.

NNPC, it was also reported, engaged in foreign exchange scam by using exchange rates lower than what was obtainable  at the Central Bank of Nigeria in its transactions. The scam led to the loss of N98.3bn by the government  within the period of three years (2009 – 2011).

Similarly, operators in the oil and gas sector engaged in under reporting quantities they produced for the purpose of Petroleum Profit Tax assessment. This scam led to the loss of $2.65bn.

The report also showed that the unresolved difference between what the government received and what companies claimed they paid amounted to $68.4m

Another $311.85m represented cash flow to the Federation Account as claimed to have been paid by operators in the sector but the payments had not been confirmed in CBN statements.

The report indicated  that Nigeria made $143.5bn (about N22.35tn) from oil and gas operations  between 2009 and 2011. It also showed that the subsidy claims by the  NNPC grew astronomically within the three years covered by the report.

Mitee said, “The financial report clearly underlines that contrary to the practice where subsidy payments are claimed from the Petroleum Support Fund through the Petroleum Products and Pricing Regulatory Agency by the qualifying oil marketing companies,  the NNPC draws subsidy payments directly from domestic crude sales proceeds before remittances to the Federation Account.

“As a result, a sum of N1.4tn was claimed during the period by the NNPC as oil subsidy payments. Subsidy payments claimed by the NNPC increased by 110 per cent. For example, it rose from N198bn in 2009 to N416bn in 2010.

“In 2011 alone, it rose to N786bn. The increase between 2009 and 2011 alone was 186 per cent. The physical and process audit expected to be released in March is currently carrying out further validations on subsidy payment transactions to include other marketers.

“Another important revelation of the report is that financial flows from the  NLNG include dividends and repayment of loans of which an amount of $4.84bn was received by  the NNPC.

“The report confirmed that these amounts have not been remitted neither to the CBN/NNPC JP Morgan Account nor the Federation Account.

“Furthermore, the report observes that this has been a recurring issue as an amount of $3.99bn was also reported as received but not remitted by the NNPC in the previous audits.

“The audit report also reveals that the  NNPC owes N1.31tn to the Federation Account as of December 31,  2011. This is a trade debt. This is because the sum of N928bn falls within the 90 days permissible period, leaving a balance of N377bn which the NNPC is currently paying by installment to the Federation Account.”

When contacted, NNPC’s General Manager, Media,  Dr. Omar Ibrahim, said  the corporation  had yet to see the report.

“We have not seen the report. When we see it,  we will study it and then respond. What we can assure Nigerians is that many of such reports had come out and they turned out to be false. A typical example is the Auditor-General’s report that was released last year,” he said.

The total fund accruing to the nation, according to the report, came through proceeds from the sales of equity crude, royalty, signature bonus, concession rentals, gas flaring penalties, PPT and companies income tax.

Mitee said, “A breakdown of these earnings shows that sales of crude oil and gas within the period under review amounted to $81.9bn. The total sum of revenues that accrued to government from PPT, royalty, signature bonus, gas flaring penalties and concessional rentals amounted to $45.7bn; revenue from companies income tax, value added tax and withholding tax within the period amounted to $6.1bn, while the sum of $4.8bn was reported as revenue from dividends and repayment of loans by the  NLNG.

“The total cash flow to states arising from withholding tax and PAYE was $1.5bn while the total cash flow to other entities arising from the contributions to Niger Delta Development Commission and education tax was $3.2bn.

“The total financial flow represents a decrease of four per cent from what government earned in the sector in 2006 to  2008 when compared to total flow of $148.8bn as against the reported government earnings of $143.5bn for 2009 – 2011.”

Mitee explained that the decrease was largely due to adjustments in the applicable average oil price despite fairly consistent production volumes.

Mitee said from the alleged scam of under reporting that led to under assessment of $2.65bn, a total of $442m had been recovered while some operators affected in the allegation were threatening legal actions.

He also disclosed that some companies refused to collaborate with NEITI and its auditors in the process of compiling the report.

The companies include NECONDE Energy Limited, SEPTA Energy Limited, Energia Limited and Emerald Energy Resources.

The NEITI chairman said the organisation would impose appropriate sanctions on  the companies in accordance with its ( NEITI ) enabling Act.

The report said there was a need to confirm the ownership of the 49 per cent investments in  the  NLNG – whether it was for the benefit of the federation, the Federal Government, or  the NNPC.

It called on the Federal Government to consider reviewing the daily allocation of 445,000 barrels per day to the level of available local refining capacity to avoid the gap process.

The report said, “Domestic crude oil sale proceeds should be paid to  the CBN in the currency of sales, where it should be converted at the appropriate rate by the apex bank  and  then  moved into  the Federation Account. This is to forestall the exchange rate shortfalls.

“NNPC should promptly pay its debt to the federation. The Federal Government should review the deduction of subsidy claims from the proceeds of domestic crude by NNPC to align them with due process like other marketers who draw their subsidy claims from PSF.

“All revenues accruing to the Federation Account should be subject to provisions of the appropriation act and in accordance with the constitution. The CBN, the Federal Inland Revenue Service, and the Office of the Accountant-General of the Federation should meet and reconcile these payments. To avoid recurrence, regular reconciliation exercise should be carried out within the year of transaction.”

It added that the NNPC should disclose all contingent liabilities in its financial statements to promote transparency and accountability, especially on alternative financing arrangements.

Ribadu asks 19 Northern governors to account for N8.3trillion revenue

Bassey Udo

Published: January 27,2013

The former Chairman of the Special Task Force on Petroleum Revenue, Nuhu Ribadu, on Saturday in Kano challenged the 19 northern governors to account for the N8.3 trillion that accrued to their states between 1999 and 2010.

Mr. Ribadu, who was speaking at a two-day summit of Northern Development Focus Initiative, NDFI, lamented that there were no significant achievements on ground to show for the huge resources at the state and local government levels for the period.

According to the former Chairman of the Economic and Financial Crimes Commission, EFCC, despite the fact that each of the 414 local governments in the north currently has budget in excess of the N8.3 trillion of the entire Northern Region under the late Sardauna of Sokoto, Ahmadu Bello, successive administrations in the region have failed to meet the expectations of the people.

He blamed corruption for the problem, noting that at least 90 per cent of the nation’s resources were being stolen by public officials.

“When Major Nzeogwu made his speech to justify the takeover of power on January 15th, 1966, he mentioned that the military took over because the first republic politicians were collecting ten percent bribes. But nonetheless, it presupposes that at least they were using 90 percent of the resources to do the work. It would be great to pose the question: ‘What is happening now’?, he asked.

He said today public officials steal 90 percent of funds allocated to their agencies while allowing 10 percent for the purpose for which the funds were earmarked.

Others, he said, out rightly loot the treasury, stealing directly from source as revenues accrue to their governments or agencies.

Mr. Ribadu recalled the statement credited to the UK Prime Minister, David Cameron, at the ongoing World Economic Forum in Davos, that the revenue received by Nigeria in 2012 from the sale of crude oil was more than the yearly aid the entire sub Saharan Africa received.

“Where is the money, where is the improvement?” he asked

The former EFCC chairman decried the under-development of the North and erosion of the legacies of the late Premier of Northern Nigeria, Ahmadu Bello.

According to him, the last annual budget by the late Sardauna for the whole north was just 44 million pounds, with Northern Nigeria, which Ahmadu Bello led at independence, now 19 states, the federal capital territory, Abuja and 414 local government areas.

These 19 states and over 400 local government areas, he said, got a total of N8.3 trillion from the federation account between 1999 and 2010.

He said every local government areas has budgets per annum that is more than the budget of the entire old northern region during the Sardauna era.

“My take is that they were not corrupt and that was the reason they achieved so much with so little. What is really happening now with all these huge sums we have?

“These local government areas do not even repair township drainages. They do not maintain existing markets and motor parks amongst many other things that would take a while to mention. Nobody knows what they generate as revenue internally, because all the sums quoted in the reports and newspapers are just what they get from the federation account monthly. They hardly meet in council except when there are subventions to be shared.

To make matters worse, he said,  many legislators, especially from the northern states, hardly attend sittings to defend the interests of their constituents, adding ” are mostly busy traveling to various parts of the world with their new found wealth”.

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FG, states, LGAs shared N8.8trn in 2012

By Vanguard of Nigeria Reporters
LAGOS — THE sum of N8.8 trillion was disbursed to the three tiers of government from the Federation Account between January and December 2012 from the statutory and Value Added Tax, VAT, allocations. The receipt came mostly from oil revenue, customs duties and VAT.

According to a table compiled by Economic Confidential, this amount excludes other allocations that were occasionally made to the states from the excess crude account, domestic crude account, SURE-P, NNPC refund and foreign exchange differentials. It also excludes states and councils’ internally generated revenue.

This came as outrage trailed the squandering of N80 trillion by the three tiers of government between 2005 and 2013 going by their budget appropriations and allocations to the local councils.

A careful scrutiny of the N8.8 trillion disbursements showed that the states can be conveniently categorized into the ‘boys and men’s clubs’ with a few of the states taking hundreds of billions, others taking a little less and the majority going home with ‘paltry’ amounts.

Akwa Ibom State appears to be the ‘king of boys’, coasting home with a princely N217 billion followed by Rivers which received N177 billion and Lagos N168 billion in the 12 months of 2012. States like Ebonyi (N45 billion), Gombe (N48 billion) and Nas arawa (N49billion) emerged as the poorest states. The allocation to the states included the share of their respective local government councils which they cornered since almost all the funds to the councils are controlled by governors who determine the administrators at the third tier of government.

The disparity in the allocations to the states came as a result of the indices developed by the Revenue Mobilisation, Allocation and Fiscal Commission, RMAFC, upon which the monthly disbursements are made by the Federation Accounts Allocation Committee, FAAC, chaired by the Minister of State for Finance. The indices include population, land mass, derivation, equality, internally generated revenue and other social development factors like school enrolment, hospital beds and road networks.

Outrage greets squandering of N80trn

Director, League for Human Rights, Jos, Mr. Nankin Bagudu, said it was sad that after spending such a huge sum, most of the citizenry were still swimming in poverty.

He said: “If the figures are correct, then they are mind-blowing. There is no way we can spend such huge amount and remain how and where we are today. The challenge then is not the lack of money but using it prudently and creatively.”

First civilian Governor of Edo State, Chief John Odigie-Oyegun spoke in like manner, lamenting that the three tiers of government had not provided the much-sought democracy dividends to Nigerians.

His words: “Only a few states are beginning to show that they are trying to put in place democratic dividends for their people. But for the Federal Government, it has not been a success story on the use of its share of the resources to provide democracy dividends for the people. We always raise issues in this country, but we never follow up. So, we always give them the licence to do what they like. It is a sad commentary and one day, the people will rise either with their votes or something. All these nonsense will stop.”

On his part, Minority Whip in the House of Representatives, Mr. Samson Osagie, while noting that N80trillion allocation also included funds for personnel cost, however, agreed that not much had been achieved in the provision of democracy dividends to Nigerians in the last nine years.

He said: “I agreed with the principle that not much has been achieved in terms of development. This has been underpinned by corruption cases by the various individuals and people that have managed the resources in the last nine years. Virtually, all the resource managers, since 2007, are facing one form of corruption charges or the other. We also run an expensive government and bureaucracy and that has affected our level of spending in the country.”

It has not impacted positively on Nigerians

 Chairman, Board of Trustees of International Society for Civil Liberties and the Rule of Law, INTERSOCIETY, said the N80 trillion spent by the three tiers of government in the past nine years had not impacted on the lives of majority of Nigerians.

Speaking with Vanguard in Onitsha, Umeagbalasi regretted that the chunk of the money was borrowed from local and foreign creditors, adding that even as the country’s debt profile continues to rise, the people have continued to wallow in abject poverty.

He said: “This staggering amount ought to have boosted the infrastructure in the country, including power, but the reverse is the case. Every year, Nigerians are given reasons for non-functioning of basic things of life in spite of the enormous resources the country has.

Relatedly, Bauchi State Chairman of the Action Congress of Nigeria, ACN, Alhaji Bappa Mohammed Dafida, regretted that the N80 trillion was not channelled towards laudable projects that would change the lives of the masses.

According to him, “N80 trillion in nine years is more than enough to take Nigeria out of the woods. But up till now, there is still abject poverty among the people. The question is: Can the federal, state and local governments actually account for the money allocated to them?”

Also, Adamawa State Chairman of the Congress for Progressive Change, CPC Alhaji Ibrahim Waziri, said he would not be surprised if 60  to 70 per cent of the N80 trillion went into private pockets as there is nothing on ground to show that such amount was spent on developmental projects.

FG, 36 states shared N8.8trillion in 2012 •Akwa Ibom (N217,776,188,886.07) •Osun (N72,200,789,928.64)

•Lagos (N168,688,367,207) •Ogun (N68,975,959,765.69) •Oyo (N93,524,683,879.60) •Kwara (N52,393,463,610.54)

Facts have emerged that a total of N8.8 trillion accrued to the three tiers of government from the Federation Account between January and December 2012 from the statutory and VAT allocations.

According to a report by an authoritative online medium, Economic Confidential magazine, this amount is exclusive of other allocations such as derivation (for oil-producing states), excess crude account, domestic crude account, subsidy reinvestment programme (SURE-P), Nigerian National Petroleum Corporation refund and foreign exchange differentials.

From statistics provided by the medium, South-South states received the highest allocations, with Akwa-Ibom receiving N217,776,188,886.07, followed by Rivers State which received N177,488,261,117.17. Bayelsa State got N115,743,144,031.67;  Delta State got a total of N156,052,071,645.19, while Edo State got N68,169,040,433.24. Cross River State N63,894,575,941.74

Lagos State in the Southwest got a total of N168,688,367,207.00 (the highest in the region), followed by Oyo State, which received a total of N93,524,683,879.60. Other states in the region: Ondo, got N78,416,358,272.47 (apart from 13 per cent derivation funds); Osun, N72,200,789,928.64; Ogun, N68,975,959,765.69 and Ekiti, N50,303,046,508.

In the North-Central, Niger State got the highest, with a total allocation of N79,747,942,955.64, followed by Benue State, which got N74,603,841,100.92. Plateau got a total of N59,990,295,696.88; Kogi N70,564,808,263.64; Kwara N52,393,463,610.54  and Nassarawa, N49,262,377,875.93; FCT, N19,130,584,542.15.

Allocations to the five South-East states are as follows: Abia, N63,964,695,387.15; Anambra, N71,968,922,762.11; Enugu, N62,548,484,175.02; Ebonyi, N45,335,956,658.49 and Imo N77,410,109,305.85.

In Northwest, Sokoto State received N74,313,032,890.28; Kebbi, N63,796,638,658.10;  Kaduna, N81,046,716,051.44; Kano, N130,005,314,633.13; Katsina, N96,823,335,677.90; Zamfara, N58,718,959,085.4 and Jigawa N81,595,023,492.97.

Borno State in the Northeast received N86,937,123,465.06; Taraba State, N64,934,346,702.87; Yobe, N63,558,436,853.11; Adamawa, N69,270,963,933.11; Bauch, N78,754,834,467.25 and Gombe, N48,750,924,392.47.

The Federal Government got a whopping N2,430,374,155,844.59

Although the figures include allocations to the 774 local governments, they were not separated from those of the states because a common practice in almost all the states is the lack of fiscal freedom for the councils. “The states help the local governments to spend their money” was how a financial analyst put it during the week.

The online medium also noted that the disparity in the allocations to the states came as a result of the indices developed by the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), upon which the monthly disbursements are made by the Federation Accounts Allocation Committee (FAAC) chaired by the Minister of State for Finance.

The indices include population, land mass, derivation, equality, internally generated revenue and other social development factors like school enrolment, hospital beds and road networks.