Nigeria spent $74.38b on fuel subsidy in 2 years
By Jeph Ajobaju, Chief Copy Editor
Nigeria spent $74.38 billion on fuel subsidy between 2011 and May 2023 and has lost more than N16.25 trillion to oil theft still going on in the Deep South.
Nigeria Extractive Industries Transparency Initiative (NEITI) Executive Secretary Ogbonnaya Orji disclosed this in a report presented to House of Representatives Public Accounts Committee Chairman Bamidele Salami in Abuja.
Orji disclosed NEITI has compiled the actual amount paid as subsidy yearly, based on data collated and signed off by operators in the industry and other stakeholders.
He said NEITI also uncovered more than $8.3 billion unremitted revenue by some privately-owned oil firms and government-owned agencies which was not paid into the Federation Account, in violation of financial regulations.
He noted, however, that the agency is working with law enforcement institutions, including Economic and Financial Crimes Commission (EFCC), Independent Corrupt Practices and related offences Commission (ICPC), and Nigeria Financial Intelligence Unit (NFIU) to recover the funds into Abuja’s coffers.
“I have here, for instance, revenues we have earned from oil and gas since 1999. We also have here all the subsidy payments made. Since 2005 when it became a scandal, we began to collect the data. We began to ask questions on subsidy and as at 2021, the country had paid $74.386 billion on subsidy,” Orji said.
“And we have a breakdown of what was paid each year. We have also got a conversion of what that can possibly translate to.”
According to him, $16.25 billion was lost to oil as revealed data collected from various sign offs by operators and government agencies.
“In the course of this job, we have incentivised a lot of recoveries for the government because between what is paid and what was recovered, a lot of money in foreign exchange developed wings.
“Company A will say we paid $1 million and you go to the account of the receiving agency and you find out that either half of that money was not received or more is received more than what was paid because of poor record keeping and carelessness.”
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Inter-agency cooperation
Orji presented before the lawmakers the last report NEITI released on September 25 and announced the PAC is now a natural ally of his agency and he will give it the maximum cooperation needed, per The Guardian.
“In that report alone, over $8.3 billion were unremitted funds on the part of some government agencies and companies. Our concern is that, this is at a time when the government is going aborrowing.
“So, we bring this information with incisive and empirical information and data with evidence and table it.
“We have also released the same report on the solid minerals sector and all the information and data are provided. [In] November, we are releasing the last report for the year which is on fiscal allocation and statutory disbursements.
“Every year, under the EITI framework developed template, we ask the questions, how much money do the companies pay to the government. How much of that money does government receive? Where is the money? What did we use the money for?
“And in the wisdom of the National Assembly in formulating the law, we said we shouldn’t just say no to the only money the government received or how much the companies paid but we should ask if they pay what they should pay and if the government receive what they should receive.
“The revenues that were made, who got what and how, were the sharing formular followed, what of the 13% derivation fund, what of those statutory receivers like TETFUND, PTDF, like INEC and all those that received Extractive sector directly from the revenue account. Where do they trace the money for the account, where did it go to?
“Sometimes we take all of these for granted but it’s not always like that. If you go through this report and follow up, you will be shocked that it’s not just sharing and allocation. Getting to the people, the government and the right sources has also been a huge challenge and that is what we have been battling with.”