Headlines

Audit report exposes Customs, NNPC under- remittance to Federation account.

Aghughu Adolphus, Auditor-General of Federation

Eyewitness reporter

The 2019 Auditor- General’s Federation Annual Report has shown that the country may have been shortchanged to the tune of N666.15 billion due to the discrepancies observed in the financial books of the Nigerian National Petroleum Corporation (NNPC) and Nigeria Customs Service (NCS).

Section 85(5) of the 1999 Constitution of the Federal Republic of Nigeria, (as amended), states that “the Auditor-General shall, within ninety days of receipt of the Accountant-General’s financial statement, submit his reports under this section to each House of the National Assembly and each House shall cause the reports to be considered by a committee of the House of the National Assembly responsible for public accounts”.

In compliance with the provisions of the 1999 constitution of the Federal Republic of Nigeria, on August 18, 2021, the Auditor-General for the Federation, Aghughu Adolphus, submitted to the Clerk of the National Assembly the Annual Report on the Federal Government of Nigeria Consolidated Financial Statements (CFS) for the year ended 31st December 2019.

A review of the Audit report revealed that some of the figures, particularly those of the NNPC and NCS did not tally.

Thus, it may have led to a huge loss of revenue to the government.

On page 50 of its 2019 Annual Reports and Financial Statements, the NNPC-National Petroleum Investment Management Services (NAPIMS) reported that it transferred the sum of N1.27 trillion to the Federation Account

However, in the 2019 Audit report, the Accountant-General of the Federation (AGF) who is the Chief Accounting Officer for the receipts and payments of account of the federation, noted in his records submitted for audit that only N608.71 billion was received as a remittance by NNPC into the Federation Account for 2019.

This shows a difference of N663.90 billion, between the figure NNPC-NAPIMS reported in its audited financial statements and the amount the AGF claimed the NNPC transferred into the Federation Account as remittance for 2019.

Similar discrepancies were noted in the financial books of the Nigeria Customs Service.

As noted in the Auditor’s report, the NCS generated revenue of N841.27 billion in 2019. This exact amount was supposed to be remitted by NCS to the Federation Account.

However, only the sum of N839.02 was remitted to the Federation Account through the Nigerian Integrated Customs Information System II (NICIS II), indicating that the total money remitted fell short by N2.26 billion.

If the NCS’s N2.26 billion variance is added up with the N663.90 billion shortfall observed in the financial statements of NNPC and AGF’s record, it brings the total figure to N666.15 billion.

As the Auditor General noted in the report, these discrepancies mean a loss of revenue to the government and could lead to difficulty in funding the (2019) budget.

True to the worries expressed by the Auditor-General in the 2019 Audit report, it was actually difficult for the government to fund its 2019 budget as the government resorted to borrowing.

In December 2018, President Buhari presented to a joint session of the National Assembly a proposed budget of N8.83 trillion for the 2019 fiscal year.

In his budget presentation, the President noted that the 2019 budget had a projected deficit of N1.86 trillion which was to be financed by borrowing.

The country’s Finance Minister, Zainab Ahmed stated clearly that, “we (the government) intend to fund the 2019 budget through borrowing locally and internationally with a spread of 50:50”, indicating that the government lacked the necessary revenue to fund its budget for that year.

The 2019 budget was not the first the government-financed through borrowed funds.

Prior to this, the government has borrowed both home and abroad to help to finance its budgets and to fund infrastructure projects, the trend which continues till today.

However, if the N666.15 billion arising from the differences in the financial records provided by the NNPC and AGF, as well as that of the NCS had been fully remitted to the Federation Account as the Audit report showed, it could have potentially reduced the amount the government borrowed to fund the 2019 budget by 35.71%.

This could have also reduced the country’s debt burden which currently stands at N35 trillion and is projected to rise to the tune of at least N41 trillion before the end of 2022.

While the government continues to devise ways to tackle the problem of revenue shortages that have made it difficult to fund its annual budgets, economic experts advised that the Federal Government should follow the recommendations of the Auditor General by ensuring that the management of the NNPC provide reasons for the discrepancy between what it reported in its NNPC-NAPIMS audited financial statements and the figure reported by the AGF as NNPC-NAPIMS remittance into the Federation Account for 2019.

The same should apply to the management of the NCS.

Related Topics:Customs featured NNPC under remittance

Up Next

The thriving business of corruption at Nigerian ports

Don't Miss

Abubakar Ali Peters, Nadabo Energy boss, on trial over alleged N1.4bn oil subsidy scam.

Click to comment

Economy

Prices of cooking gas to crash as federal government exempts LPG, allied products from Customs duty,VAT

The Federal government has directed that imported Liquefied Petrolium Gas(Cooking gas) and all its allied equipment like cylinders should be excepted from the payment of Customs duty and Valu-Added Tax(VAT).

This directive is expected to crash the galloping prices of the product which is being sold between N950 to N1200 per 1 kg

The Ministry of Finance disclosed this in a letter (dated November 28, 2023) to the Special Adviser to the President on Energy; the Comptroller-General of the Nigeria Customs Service (NCS); and the Chairman of the Federal Inland Revenue Service (FIRS).

According to the ministry, the exemption aligned with President Bola Tinubu’s commitment to enhance Nigeria’s investment climate, and promote clean cooking practices.

“In line with His Excellency, President Bola Tinubu’s commitment to improving the investment climate in Nigeria, increasing the supply of LPG to meet local demand, reducing market prices and promoting clean cooking practices, I hereby affirm Presidential directive dated July 29, 2022, with reference number PRES/88/MPR/99,” the letter reads.

“Accordingly, the importation of LPG utilising HS Codes 2711.12.00.00, 2711.13.00.00 and 2711.19.00.00 is exempt from Import Duty and Value-Added Tax. Consequently, the Importation of LPG shall incur a 0% duty rate and 0% VAT rate, effective immediately.”

The ministry instructed the NCS and FIRS to comply with the directive pending its official gazetting. \

Also, the ministry directed the NCS to comply with the presidential directive, dated July 29, 2022, and withdraw all debit notes issued to petroleum marketers who have imported LPG “using codes 2711.1.2.00.00 and 2711.13.00.00 from August 26, 2019, to the present date”.

Other items exempted from VAT and duty payment are LPG cylinders, LPG cascades, gas leak detectors, steel pipes, steel valves and fittings, LPG dispensers, gas generators, LPG trucks, among others.

Before now, 7.5 per cent VAT was slammed on the product which made its prices in the market to hit the roof.

Headlines

Maritime media charges federal government on disbursement of controversial CVFF

President Tinubu

The Eyewitness Reporter

Worried by the stalemated disbursement of the controversial Cabotage Vessel Finance Fund (CVFF) which has lingered for so long, the League of Maritime Editors (LOME) has urged President Ahmed Tinubu to expedite action on the release of the funds to trigger the development of indigenous shipping industry.

The group also called for urgent rehabilitation of collapsed critical port infrastructure at the nation’s seaports.

The President of LOME, Timothy Paul Okorocha, made these calls at the League’s 25th anniversary held in Lagos on Wednesday, with the theme ‘Harnessing Nigeria’s Potential in Marine & Blue Economy’,

While congratulating President Bola Tinubu for the further unbundling of the Ministry of Transportation and the establishment of the Ministry of Marine and Blue Economy, Okorocha appealed to the President to exercise the required political will to push further by ensuring that the routine talk about the rehabilitation of collapsed critical port infrastructure receives urgent executive attention.

“As development partners, the League looks forward to the effective participation of the respective agencies in the current administration’s renewed agenda template; and wants to see the Nigerian Ports Authority move away from the ritual of endless talk and lamentations into doing the needful, the reconstruction of broken down asset and infrastructure,” he said.

Also worried by the lingering delayed disbursement of the CVFF, the League further urged President Ahmed Tinubu to provide the Minister of Marine and Blue Economy, Adegboyega Oyetola, and his ministry, the needed impetus to bring to an end, the unending rat race of the disbursement of the CVFF, saying that the fund established since 2003 would jump-start a new lease of life for the capacity development of indigenous ship-owners.

He added that this would enable Nigeria to participate meaningfully in seaborne trade; especially with the proposed commencement of the implementation policy of the blue economy.

The LOME President noted the genuine struggle by the Nigerian Maritime Administration and Safety Agency (NIMASA) and its leadership, especially under the present administration to disburse the CVFF but observed that the efforts suffered political disruptions.

“As insiders, the League over the years has seen the genuine struggle by the Nigerian Maritime Administration and Safety Agency (NIMASA) and its leadership, especially under the present administration to disburse the CVFF in its commitment to grow local capacity building, but observe the otherwise disruptive tendencies within the field of political play.

“We appeal to Mr. President to use his good offices to prevail on the relevant authorities to respond to the needs of our industry as there can be no better time than now,” he said.

Speaking on the theme of the conference, Doctor Charles Okoroefe of Nigeria Maritime University also hailed the unbundling of the transportation ministry which he said was a misnomer.

He has decried the untapped potential of marine resources, especially in the area of tourism in Nigeria, regretting that marine tourism is lacking in Nigeria unlike in Gambia and the Caribbean where marine tourism is a major source of income where marine tourism rakes in billions of dollars.

“Egypt made about $14 billion in tourism from the Nile in 2022,” he added.

“People troop in into the Bahamas. Do we (Nigeria) have the potential? Yes. But the question is how prepared are we?” he queried.

He stressed that marine tourism is a solution in terms of job creation and that the time has come for Nigeria to progress from potential to actuality.

“So talking about job creation. All of these elements I mentioned are potential areas for job creation because it is a major issue in Nigeria today.

” A lot of young people are jobless. Meanwhile, we have an area that is green where a lot of jobs can be created.

“So I think we have to look at that potential area of driving our marine and Blue Economy,” Okoroefe stated.

He also called on the Ministry of Marine & Blue Economy to synergise with the Ministry of Agriculture to harness the potential of the sea.

“So, I believe the Ministry of Marine and Blue Economy has to synergise with the Ministry of Agriculture and also harness exotic seafood for export,” he explained, saying we cannot be depending on imports alone.

He urged the ministry to look at other fundamental seafood we have in excess that we can process through the rivers for export.

The marine expert regretted that Nigeria still imports palm oil from Malaysia, the same people who came to Nigeria to learn how to plant seedlings and today Nigeria is importing palm oil from Malaysia, “these are exportable items. So I believe the Ministry of Marine has to do a lot.

“With the Ministry of Agriculture for instance, with the Ministry of Power and the Ministry of Tourism, these are resources that we need to address in order for us to develop and come out of potential to thrive. On our ocean and marine resources, we’ve been talking endlessly.”

Headlines

Tantita refutes, describes allegation of oil theft by Navy as libelous, defamatory

Capt. Warredi Enisuoh

The Eyewitness Reporter

Following an allegation of involvement in the alleged oil theft incident against Tantita Security Services Limited by the Nigerian Navy, the security outfit has described the accusation as laughable and an attempt by the Navy to cover up the truth.

The security outfit, which has received widespread commendation for its efforts in combatting the menace of oil theft in the country, debunked accusations of any involvement of its operatives in the incident while lampooning the Navy for underestimating its operatives.

Reacting to the development, the Executive Director – Operations and Technical, Tantita Security Services Nigeria Limited, Capt. Warredi Enisuoh in a statement described the Navy’s claim as “defamatory and libelous”.

The statement said: “The activities going on inside the Nigerian Navy’s FalconEye should be investigated as the ship was only a few kilometers off the coast of Ondo State, well within view of the Nigerian Navy’s FalconEye, but they never reacted”.

“We are indeed saddened and disappointed that the Nigerian Navy could descend so low as to make such bizarre accusations against our organisation, knowing the same to be false,” he added.

“Perhaps they are not aware that video evidence of what transpired between the Tantita operatives and the Nigerian Navy at the scene exists and has been transmitted to the highest authorities.

“We will therefore not join issues with the Nigerian Navy as we are well aware that Nigerians know who is who.”

It would be recalled that the activities of Tantita and other security outfits have saved the country a whopping $43.2m from oil theft daily.

Recalled that on Thursday, December 7, 2023, the Nigerian Navy had disclosed that 17 people said to be engaged in the illegal siphoning of crude oil in Ondo State were nabbed aboard a 77-meter-long Motor Tanker (MT) VINNALARIS 1 Lagos.

Navy spokesperson, Commodore Adedotun Olukayode Ayo-Vaughan, disclosed in a statement, saying the suspects were nabbed at the Forward Operating Base (FOB) Igbokoda in the early hours of Thursday.

However, a day later, the Navy turned around to accuse Tantita Security Services Limited (TSSL) of complicity in the incident.