FG, recover $205m unremitted funds


THE recent discovery of $205.01 million unremitted to the Federation Account by oil firms calls for serious scrutiny. According to reports, the discovery was made by the Revenue Mobilisation Allocation and Fiscal Commission through joint efforts with the Economic and Financial Crimes Commission. With public revenues crashing and debts mounting, the government should adopt a zero-tolerance attitude towards unremitted funds.

At many points, the fiscal behaviour of the Nigerian government confounds the world. Strapped for cash, incurring massive deficits, facing rising costs, and piling up debt, yet it demonstrates a baffling lethargy in collecting huge amounts owed to the treasury; it does not block revenue leakages, or move to improve its pathetic tax system. Instead, it relishes piling extra burdens on the already over-taxed, and on the vulnerable.

The RMAFC’s latest discovery typifies this self-subversion. The agency said it had recovered from revenue-generating agencies, banks, and corporate organisations over N192 billion, which included N74 billion between 2008 and 2015; as well as N118 billion between 2016 and 2019, with the help of the EFCC.

The $205.01 million is due from some oil and gas companies, which refused to remit same to government coffers as requested by the RMAFC and the EFCC, who had uncovered the withheld funds. Brazenly, instead of duly remitting the funds after being found out, the culprits filed lawsuits, claiming that the two agencies were not authorised by law to request for the withheld funds.

Though shocking, this is not the first time that government agencies and other organisations mandated by law to remit money into the Federation Account would refuse to do so and curiously, the government would look the other away. In this case, the RMAFC, having drawn attention to it, the relevant government agencies should have acted swiftly to recover the outstanding sums. Instead, the government is borrowing to pay workers’ salaries, and to service debts!

For instance, the Federal Government has made no serious moves to recover the $62 billion outstanding from six international oil companies despite a Supreme Court judgement in October 2018 ordering the firms to pay up. The court directed the government to immediately take steps to recover all revenues lost to oil-exploring and exploiting companies due to the wrong profit-sharing formula used since August 2003.

Similarly in May 2021, the Senate Committee on Finance revealed that 60 government-owned enterprises failed to remit a total of N3 trillion in six years, contrary to the provisions of the 1999 Constitution and the Fiscal Responsibility Act.

The failure of key revenue-generating agencies to remit as appropriate has become endemic. It is a crime and should be treated as such. The President, Major General Muhammadu Buhari (retd.), like his predecessors, has been treating the fraudulent practice with levity. Frequent enquiries, complaints, and threats by the National Assembly over the years have also been futile. The major defaulter, the Nigerian National Petroleum Company Limited, unabashedly announced that it made zero remittance to the Federation Account in the seven months to July, 2022. That same month, it billed the government N448.78 billion for the notoriously opaque petrol subsidy.

While it leaves huge revenues uncollected, the government has been on a borrowing frenzy. According to the Debt Management Office, the total public debt stock (domestic and external) of the Federal Government, the 36 state governments and the Federal Capital Territory was N42.84 trillion ($103.31 billion) as of June. The comparative figure in March was N41.60 trillion ($100.07 billion).

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The total external debt stock was $40.06 billion (N16.61 trillion) as of June, which was almost the same level as the figure for March, which stood at $39.96 billion.

The total public debt-to-GDP ratio in June was 23.06 per cent compared to 23.27 per cent in March, and remains within Nigeria’s self-imposed limit of 40 per cent. The IMF puts its debt service-to-revenue ratio in 2021 at 76 per cent, and 92 per cent in 2022. This is unsustainable.

For long, the agencies abusing the concept of retaining part of their operating surpluses to short-change the government rely on ministerial circulars in defiance of the constitution and the FRA. They thrive because of the government’s indifference and complicity.

Buhari should move against this practice and the officials perpetrating it. The EFCC and the Independent Corrupt Practices and Other Related Offences Commission should step up their interdiction of erring agencies and personnel.

The government should institutionalise mechanisms that will make it impossible for any entity to do what it pleases with the funds that are meant for the entire commonwealth. While a policy like the Treasury Single Account is commendable, all the loopholes that make it possible for some organisations to circumvent it must be plugged.

NASS members should live up to their oversight functions and hold the executive accountable by insisting that lawbreakers must face the music. Instead of repetitive threats which they never see through, the NASS should never again approve new budgets for MDAs that fail to remit due funds, or submit their audited accounts as required by law.

The NNPC’s failure to contribute to the Federation Account means that it has not funded the statutory joint account of the three tiers of government at all this year. This has exacerbated the public revenue crisis with allocations to the central and sub-national governments dwindling even further. The NNPC deductions from the Federation Account rose by 40.5 per cent to N883.56 billion in the first quarter of this year and the company had projected to deduct another N328 billion in April.

There should be greater seriousness in governance. Remitting revenue to the treasury and collecting all due government revenues are not subject to anyone’s discretion. They are ironclad legal responsibilities imposed by the country’s supreme law, enabling ordinances and regulations. MDAs have no choice but to remit; the government is duty-bound to ensure compliance using all administrative, financial, and coercive means. Buhari should not leave this mess as he met it; he should act decisively today.


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