NNPC, Customs, FIRS, others underpay N8tr to Federation Account – NEC

An audit commissioned by the National Economic Council (NEC) has reported that 16 revenue-generating federal agencies short-changed the Federation Account by N526 billion and $2 billion between 2010 and June 2015.

At its meeting chaired by Vice President Yemi Osinbajo at the Aso Rock Villa, NEC received the final report of the forensic audit of the agencies conducted by an international accounting firm, KPMG.

The affected agencies are the Nigerian National Petroleum Corporation (NNPC), Federal Inland Revenue Service (FIRS), Nigeria Customs Service (NCS), and the Nigerian Ports Authority (NPA).

Others are the Nigerian Maritime Administration and Safety Agency (NIMASA), Nigerian Communications Commission (NCC), Central Bank of Nigeria (CBN), Department of Petroleum Resources (DPR), and Nigerian Petroleum Development Company (NPDC).

The report was read to State House correspondents by the Governor of Gombe State, Alahaji Ibrahim Dankwanbo, who also chaired the NEC’s ad-hoc technical committee on the probe.

He stated that the Council adopted the report and resolved to refer those found culpable in the underpayments to the Attorney-General of the Federation (AGF) for prosecution.

According to him, “KPMG presented the report of the technical audit of Revenue Generating Agencies (RGAs), concluding that the sum of N526 billion and $21 billion were under-paid to the Federation Account.

“Council adopted the presentations and reports of the KPMG and the recommendations of its Ad-hoc Committee including a resolution to identify instances where there appears to have been criminal infringements and forward such to the Attorney-General of the Federation and the Legal Committee of the National Economic Council for further action.

“Council resolved to pursue strengthening of the NNPC governance structure to prevent further recurrence of such gross under-remittance by the NNPC and other RGAs,” he said.

The committee, which also has other members as governors of Edo, Kaduna, Akwa Ibom, and Lagos States as well as the Finance Minister, further recommended a refund of the amounts under-paid by the defaulting agencies.

Dankwanbo added that “one of the resolutions of NEC is to extend the audit to June 2017. So the audit will continue for the remaining agencies: NNOC, NPDC, DPR, Customs, FIRS, NPA, maritime agencies, all the revenue generating agencies and the details of the infringement are contained in the report.

“The most important decision that was taken is that a sub-committee will be set up, which will be an arm of the legal committee of NEC that will look into details of these kinds of infringements and make sure that those issues that are criminal and require prosecution will be handled by office of the Attorney General of the Federation”.

The NEC also heard that the balance in the Excess Crude Account (ECA) as at May 14, 2018, stands at $1.83 billion; the Stabilisation Account as at May 14, 2018 stands at N15.72 billion; and the current balance in the Natural Resources Development Fund as at May 14, 2018, stands at N116.10 billion.

The Governor of Zamfara State, Abdulaziz Yari, disclosed that the suspicious subsidy payments by the NNPC was also discussed during the meeting, but it was referred to the sub-committee on remittances, which he chairs.

Yari said: “Our problem is the volume, the quantity of consumption which is not acceptable. Working with the governors so many decisions were taken but by next month, we are going to adopt the position that either the governors take responsibility for the subsidy in their states based on their consumption or we look at other ways.

“For instance, if you say we paid N800 billion subsidy, you will ask who are we paying the subsidy to? And if you look at infrastructure development and capital programme of the federal government, it is about N1.1 trillion, almost 70 per cent of what you are spending developing the economy.

“If there is no infrastructure development then you cannot talk about development of the economy. N800 billion is a huge amount and we must look into it: who is benefiting from it.

“By next meeting (May or June), we will definitely come up with a position of the government at both levels of volume of what is being brought into the country and what the state and federal government collaborate to check”.

The governor also updated the press with highlights on a report of the Nigeria Industrial Policy and Competitiveness Council in collaboration with the NCC, which recommended state government’s intervention in boosting the country’s drive towards more investments and business-friendly environment.

These are improving broadband penetration in the countryside; resolving multiple taxation; facilitating access to land; providing security for investment; standardising regulatory requirements; facilitating integrated business linkage; collaborating on project development; providing shared facilities.

Osun State Governor, Rauf Aregbesola, briefed on the work of the Technical Working Group (TWG) and the Sub-national Ease of Doing Business Project covering October 2017 to date, some of which include: adopting the model of Presidential Enabling Business Environment (PEBEC) by the states working with their reform champions; collaborating with the states in setting up structure for Ease of Doing Business similar to the PEBEC; and organising state and regional stakeholders’ fora supported by the states in order to communicate and validate the impact of reforms with SME/OPS within each State and region.

The Minister of National Planning, Udoma Udo Udoma, gave the NEC his report on the Economic Recovery and Growth Plan (ERGP) Focus Labs conducted round the country recently.

The Labs identified 164 projects spread across the six geo-political zones of the country, indicating that over 500,000 jobs are likely to be created by 2020; and that more labs would be conducted in due course for other sectors, with a recommendation that States should adopt the same model.

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