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Reps Indict NNPC, NPA, Others Over Unremitted FG Revenues

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House of representatives
  • Reps Indict NNPC, NPA, Others Over Unremitted FG Revenues

The House of Representatives has accused Federal Government’s ministries, departments and agencies of failing to follow the Treasury Single Account policy, leading to revenue leakages.

The House said it had discovered that over $900m was still “being held” by the MDAs outside the TSA.

Adopting the report by the Ad Hoc Committee on the Need to Ascertain the Proceeds of the TSA to Enhance Transparency, Accountability and Good Governance, the House indicted the Nigerian National Petroleum Corporation, the Nigerian Ports Authority, the Federal Inland Revenue Service, the Nigeria Customs Service, ministries and banks of various infractions.

All the 20 recommendations by the panel were unanimously approved by the House, including that the Ministry of Finance, the Office of the Accountant-General of the Federation and the Central Bank of Nigeria should intensify efforts to enforce full implementation and compliance with the TSA policy by all the MDAs.

While asking that the MDAs who had violated the TSA policy be sanctioned accordingly, the lawmakers ordered that the Ministry of Finance and OAGF “should be directed to publish, sanction/prosecute with immediate effect all MDAs, private persons, private organisations as well as banks, where FGN funds are hidden based on the discoveries made in the report of the consultants engaged by the OAGF and review the compliance with the TSA.”

They said applications for exemptions/waivers must follow the guidelines on TSA implementation and duly approved and signed by the President only.

The lawmakers said the Ministry of Environment’s HYPREP Account in Stanbic IBTC Bank Plc should be immediately frozen and full investigations on the status of the account should be conducted.

They said “the issues bordering on the Nigerian Ports Authority fund totalling €6,626,429.59 seized by the Economic and Financial Crimes Commission should be resolved immediately and the funds released to the appropriate owner. The EFCC should be informed in writing to immediately refund the same amount into the TSA account with the CBN.”

The NNPC was asked to make full disclosures on the nature and status of the fund held in the NNPC Pension Fund Limited domiciled in Aso Savings and Loans Plc and Unity Bank.

It was also resolved that “the Ministry of Finance, the OAGF and the Revenue Mobilisation, Allocation and Fiscal Commission should make a definite and appropriate categorisation of the Brass LNG dividends as a federation account item or as an independent revenue of the Federal Government; that subsequent funding and expenditure of the Brass LNG project be done based on approved budgetary provisions by Appropriations Acts and the funding shall be done through the FAAC/CRF Account.

“That the revenue collection arrangement entered into by the Industrial Training Fund with Puzzle Technologies Limited be suspended and the Ministry of Finance and the OAGF should immediately conduct an investigation into the circumstance of the arrangement.

“That there should be an immediate takeover of the assets used for the asset swap for Aso Savings & Loans Plc’s debt owed various MDAs. The Federal Ministry of Finance and the OAGF should be communicated to immediately inform the affected MDAs to take advantage of the offer.”

The report presented by the Chairman of the committee, Mr Danduram Abubakar, read, “During the course of investigations with various stakeholders, overwhelming discoveries were made. It was observed (that) funds belonging to the Federal Government to the tune of billions of naira and hundreds of millions of dollars were operated outside the TSA by the MDAs in collaboration with the banks.

“After the meeting with Deposit Money Banks, the Central Bank of Nigeria, the Office of the Accountant-General of the Federation, the Office of the Auditor-General of the Federation and the Nigerian National Petroleum Corporation on August 15, 2017, the committee discovered that over $900m is still being held outside the TSA.

“While some banks fully complied with the directive of the ad hoc committee by remitting these funds into the TSA, it is worthy of note that the sum of about $995.71m was still held outside the TSA by some other banks. This sum of $995.71m includes the principal deposit and the accrued interest on the deposit. Also discovered was an amount of N1.207bn and €23,704.01.”

The House accused the NNPC of extra-budgetary spending as the committee said from the information submitted by the corporation, Brass LNG received an appropriation of $511.60m while the actual release was $461.54m during 2012-2017 fiscal years.

The panel said, “The Appropriation Acts 2012-2017 depicted $550.33m for the Brass LNG project. But it is very important to note some key observations on the table above: The total appropriation is $511.60m, according to the NNPC. The actual funding for the Brass LNG project from 2012 to 2017 stood at $461.54m. The unutilised portion is $331.72m. The NNPC stated unrealised balance with the DMBs being $708.29m.”

The committee observed that some MDAS claimed to have obtained a presidential exemption to operate certain accounts outside the TSA policy.

It said, “In the case of NNPC, the committee insisted to sight the purported exemption letter. However, to the dismay of committee, the letter was only conveying the approval of the President signed by an assistant director. As for the former, the letter could not be produced as of now, May 9, 2019.”

The lawmakers also accused NNPC of financial operations outside the TSA, saying, “The balance in this (CBN Joint Venture) account as reported by the NNPC, dated 30th October, 2017, stood at $188,900,383.49. These are the various accounts classified as accounts still not being moved to TSA by CBN, DMBs account.

“The committee discovered three accounts held by the NNPC in Aso Savings and Loans PLC and Unity Bank PLC. The accounts include two placement accounts called NNPC PFL Placement Deposit and the third account called NNPC Pension Fund account. The total balance in these accounts as of August 27, 2017, stood at N1, 079,444,746.49.

“The committee also made another startling discovery of a fund held in another DMB by the Federal Ministry of Environment; Hydrocarbon Pollution Remediation Programme called FME HYPREP Account. The balance in this account as of September, 2018, stood at N1.1bn and $4.9m domiciled in Stanbic IBTC Bank.

“However, the committee had written to the Minister of Environment for a status report on this account and also for the minister to appear before the committee to make clarifications in respect of the account in contention. To the dismay of the committee, the minister neither made any submission nor made any appearance.”

The NPA was also indicted by the panel, which said the authority’s funds were trapped by Intels.

“Further investigations revealed to the committee (that) a whopping value of $569,162,083.80 as Intels’ obligation to the NPA. On the other hand, Intels’ submitted to the ad hoc committee in 2017 an outstanding obligation to the NPA as $862.2m. The difference from the two submissions might have been after Intels have made additional payment to the NPA after the NPA submission to the committee,” the report read.

The lawmakers said the documents submitted by the OAGF and the CBN showed that between January and September 2016, the FIRS collected N32, 689,825,757.91 while Customs collected N975, 923,050.49.

The panel said, “The figures above clearly cannot include the Federal Government’s share of Federal Account Allocation Committee revenue collected by these core revenue generating agencies and may just be their independent revenue component.

“Projected FGN share of Company Income Tax alone for Fiscal 2016 is N867.46bn, which implies a projected collection of about N650.59bn as of 30th September 2016. Projected FGN share of Customs’ collections is N326.44bn, which implies a projected collection of about N244.83bn as of 30th September 2016. These figures are clearly much more than what was submitted by the CBN and OAGF.

“As a further illustration, official Customs’ revenue as of 30th September 2016, as published by the Nigeria Customs Service, shows a total collection of N647, 295,101,275.51. It is clear, therefore, to the committee that the submissions made by the executives to the committee did not include the FGN share of FAAC collections from these two revenue generating agencies.”

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Economy

Electricity Consumers Get 611,231 Meters Under MAP Scheme

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power project

Electricity Consumers Get 611,231 Meters Under MAP Scheme

A total of 611,231 meters have been deployed as at January 31, 2021 under the Meter Asset Provider initiative since its full operation despite the COVID-19 pandemic and other extraneous factors, the Nigerian Electricity Regulatory Commission has said.

NERC disclosed this in a consultation paper on the review of the MAP Regulations.

The proposed review of the MAP scheme is coming nearly four months after the Federal Government launched a new initiative called National Mass Metering Programme aimed at distributing six million meters to consumers free of charge.

“The existence of a huge metering gap and the need to ensure successful implementation of the MYTO 2020 Service-Based Tariff resulted in the approval of the NMMP, a policy of the Federal Government anchored on the provision of long-term low interest financing to the Discos,” NERC said.

The commission had in March 2018 approved the MAP Regulations with the aim of fast-tracking the closure of the metering gap in the sector through the engagement of third-party investors (called meter asset providers) for the financing, procurement, supply, installation and maintenance of meters.

It set a target of providing meters to all customers within three years, and directed the Discos and the approved MAPs to commence the rollout of meters not later than May 1, 2019.

But in February 2020, NERC said several constraints, including changes in fiscal policy and the limited availability of long-term funding, had led to limited success in meter rollout.

NERC, in the consultation paper, highlighted three proposed options for metering implementation going forward.

The first option is to allow the implementation of both the NMMP and MAP metering frameworks to run concurrently; the second is to continue with the current MAP framework with meters procured under the NMMP supplied only through MAPs (by being off-takers from the local manufacturers/assemblers).

The third option is to wind down the MAP framework and allow the Discos to procure meters directly from local manufacturers/assemblers (or as procured by the World Bank), and enter into new contracts for the installation and maintenance of such meters.

“Customers who choose not to wait to receive meters based on the deployment schedule of the NMMP shall continue to have the option of making upfront payments for meters which will be installed within a maximum period of 10 working days,” NERC said.

The regulator said such customers would be refunded by the Discos through energy credits, adding that there would be no option for meter acquisition through the payment of a monthly meter service charge.

“Where meters have already been deployed under the meter service charge option, Discos shall make one-off repayment to affected customers and associated MAPs. Such meters shall be recognised in the rate base of the Discos,” it added.

NERC urged stakeholders to provide comments, objections, and representations on the proposed amendments within 21 days of the publication of the consultation paper.

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Economy

Nigeria’s Economy Moving in Right Direction but Slow – Amina Mohammed

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Banana Island

Nigeria’s Economy Moving in Right Direction but Slow – Amina Mohammed

Nigeria is moving in the right direction economically but its movement is not fast, the United Nations stated on Thursday.

Deputy Secretary-General of the United Nations, Amina Mohammed, said this during a meeting at the headquarters of the Federal Ministry of Industry, Trade and Investment in Abuja.

She said the challenges in Nigeria were huge, its population large but described the country’s economy as great with lots of opportunities.

The UN scribe stated that after traveling by train and through various roads in the Northern parts of Nigeria, she discovered that the roads were motorable, although there were ongoing repairs on some of them.

Mohammed said, “This is a country that is diverse in nature, ethnicity, religious backgrounds and opportunities. But these are its strengths, not weaknesses.

“And I think the narrative for Nigeria has to change to one that is very much the reality.”

Speaking on her trips across parts of Nigeria, she said, “What I saw along the way is really a country that is growing, that is moving in the right direction economically. Is it fast enough? No. Is it in the right direction? Yes it is.

“And the challenges still remain with security, our social cohesion and social contract between government and the people. But I know that people are working on these issues.”

She said the UN recognised the reforms in Nigeria and other nations, adding that the common global agenda was the Sustainable Development Goals.

Mohammad commended Nigeria’s quick response to the COVID-19 pandemic, as she expressed hope that the arrival of vaccines would be the beginning of the end of COVID-19.

On his part, the Minister of Industry, Trade and Investment, Adeniyi Adebayo, told his guest that the Federal Government was working hard to make Nigeria the entrepreneurial hub of Africa.

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Economy

N10.7tn Spent on Fuel Subsidy in 10 Years – MOMAN

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petrol Oil

N10.7tn Spent on Fuel Subsidy in 10 Years – MOMAN

Nigeria spent a total of N10.7tn on fuel subsidy in the last 10 years, the Chairman, Major Oil Marketers Association of Nigeria, Mr Adetunji Oyebanji, has said.

Oyebanji, who was the guest speaker at the 18th Aret Adams Lecture on Thursday, said N750bn was spent on subsidy in 2019.

He highlighted the need for a transition to a market-driven environment through policy-backed legislative and commercial frameworks, enabling the sustainability of the downstream petroleum sector.

“Total deregulation is more than just the removal of price subsidies; it is aimed at improving business operations, increasing the investments in the oil and gas sector value chain, resulting in the growth in the nation’s downstream petroleum sector as a whole,” he said.

The managing director of 11 Plc (formerly Mobil Oil Nigeria Plc) said steps had been taken, “but larger and faster leaps are now required.”

According to him, deregulation requires the creation of a competitive market environment, and will guarantee the supply of products at commercial and market prices.

“It requires unrestricted and profitable investments in infrastructure, earning reasonable returns to investors. It requires a strong regulator to enable transparency and fair competition among players, and not to regulate prices,” Oyebanji said.

He noted that MOMAN had recently called for a national debate by stakeholders to share pragmatic and realistic initiatives to ease the impact of the subsidy removal on society – especially on the most vulnerable.

He said, “A shift from crude oil production to crude oil full value realisation through deliberate investment in domestic refining and refined products distribution, creates the opportunity to transform the dynamics of the downstream sector from one of ‘net importer’ to one of ‘net exporter’, spurring the growth of the Nigerian economy.

“Effective reforms and regulations are key drivers for the growth within the refining sector. Non-functional refineries cost Nigeria over $13bn in 2019. If the NNPC refineries were operating at optimal capacity, Nigeria would have imported only 40 per cent of what it consumed in 2019.”

Full deregulation of the downstream sector remains the most glaring boost to potential investors in this space, according to Oyebanji.

He said, “As crude oil prices will fluctuate depending on the prevailing exchange rates, it will be astute to trade in naira to avoid inevitable price swings.

“There needs to be a balance between ensuring the sustainable growth of the crude oil value chain (upstream through downstream) and providing value for the Nigerian consumer and the Nigerian economy.”

He said the philosophy should be for the government to put the legislative and commercial framework in place and let the market develop by itself.

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