By Michael Eboh
ABUJA—The Nigeria Extractive Industries Transparency Initiative, NEITI, yesterday, advised the Federal Government to jettison the planned borrowing programme and intensify efforts to recover from the Nigerian National Petroleum Corporation, NNPC, and the Nigerian Petroleum Development Company, NPDC, unremitted funds valued at about N7.2 trillion.
NEITI, in its latest policy brief, entitled, Unremitted Funds, Economic Recovery, and Oil Sector Reform, released in Abuja, said recovery of the funds would eliminate the need to source same through borrowing to finance the 2017 budget and the Economic Recovery and Growth Plan, ERGP.
NEITI said findings from series of its audits of the oil and gas sector carried out over the years, showed that NNPC and its upstream arm, NPDC, failed to remit $21.778 billion and N316.074 billion to the Federation Account.
It noted that the funds were amounts due from three main sources, including federation assets divested to NPDC and NPDC’s legacy liabilities; payments for domestic crude allocation to NNPC; and dividends from investment in Nigerian Liquefied Natural Gas company, NLNG, paid to but withheld by NNPC.
According to NEITI, recovery of these funds will significantly enhance government’s fiscal position in the short term.
It said: “The failure of government agencies to remit revenue to the treasury has significant implications for Nigeria’s economy in two ways. The questionable practice of withholding revenues due to the treasury is partly implicated in government’s current fiscal struggles.
‘’Yet, the withheld funds offer huge and interest-free opportunity to stimulate the economy, much easier and much better to access than internal and external borrowings, depending on government’s capacity and willingness to use its machinery to recover unremitted funds.”
NEITI maintained that the 2017 budget estimate included a proposed deficit of N2.32 trillion, to be financed through borrowing, warning that this level of borrowing would further compound the Federal Government’s total debt liability by about 16 per cent.
To this end, NEITI said: “It is, therefore, recommended that all outstanding revenues from NNPC and NPDC should be remitted to the Federation Account. In order to achieve this, it would require the urgent intervention of the highest political authorities, namely the Presidency and the National Assembly.”