The senate committee on finance yesterday accused the Central Bank of Nigeria (CBN), Nigerian National Petroleum Corporation (NNPC) and Nigeria Customs Service (NCS) of holding back funds belonging to the federal government.
Chairman of the committee, Mr. Olamilekan Adeola, who made the allegation during a public hearing on the 2022-2024 Medium Term Expenditure Framework/Fiscal Strategy Paper (MTEF/FSP) organised by the committee in Abuja said the agencies were not remitting their excess revenue to the consolidated revenue fund (CRF).
Over the years, the panel said the CBN failed to remit its operational surpluses from its yearly budget of about N2.3 trillion budget to the CRF
Recall that the director general of budget office, Mr. Benjamin Akabueze, had, in his presentation, complained that some agencies had failed to remit revenues.
He said while the federal government was making efforts to grow revenue, some heads of agencies had assumed ownership and were spending such revenues illegally.
However, he mentioned no agency by name.
In his reaction, Adeola noted that some revenue generating agencies “spend their revenues hiding under the disguise that what accrued to them is not enough for them to carry out their functions, and so, they need to augment it with whatever they generate.
“For every government agency that exist, it is expected that once you are coming to budget defence with your budget estimates, there should be a corresponding revenue estimate that you are contributing to the budget.
“From the preliminary investigation carried out by this committee our findings are not palatable at all. A lot of heads of agencies have taken over the agencies as their personal property.
“They have decided to embark on a spending spree with nobody challenging them. We invited some agencies and discovered that since their existence, it was the first time anybody would invite them for an investigative hearing on how they have been doing concerning revenue generation.
“I give you an example, out of the 60 government owned enterprises, I can conveniently say that agency like the NNPC, I don’t know when last they contributed from their excess revenue into the Consolidated Revenue Fund, except recently when they declared profit and I know that profit will translate to payment into the CRF,” he said.
Furthermore, he said within the last five to six years, CBN had not contributed anything.
“They are here. If that is not a statement of fact, I will back it up with verifiable evidence.
“So, all these and more are issues bordering on the idea of let’s grow revenue. We are growing the revenue but some people are spending that revenue illegally.”
Agencies deny allegations
For the CBN, the allegation against it is 100 per cent incorrect.
Deputy governor of the apex bank in charge of economic policy, Mr. Kingsley Obiora, who represented the CBN governor, faulted the lawmakers’ claim stated that the CBN had never defaulted in remitting 80 per cent of its annual revenue surpluses to the CRF in accordance with the Fiscal Responsibility Act.
“We have in the last five years remitted our surpluses in accordance with the law. The CBN Act 2007 which you graciously passed stipulates that we transmit 75 percent of those surpluses but the Fiscal Responsibility Act which you again graciously passed, demands 80 percent. As responsible government agency, we follow the Fiscal Responsibility Act and we do remit 80 percent of our surpluses every year.
“The Ministry of Finance, Accountant General of the Federation and Budget Office will tell you they have no better friend than the Central Bank of Nigeria,” he said.
The CBN was thereafter, directed to produce documents to show remittances made by it over the years and make it available to the Committee not later than Friday.
They were also asked produce its audited account in the last five years as well as its position paper on monetary policy point of view on the 2022 – 2024 MTEF/FSP being considered by the committee.
In his defence, the comptroller general of the NCS, Col. Hameed Ali (retd), expressed frustrations over the inability of his agency to raise enough revenue from taxes on import.
He asked the national assembly to empower the NCS through appropriate legislation to collect excise duty on carbonated drinks.
“Today we have low production within the country and therefore we are unable to expand our excise duty base. We are supposed to be collecting excise on carbonated drinks.
“The policy of government is to reduce consumption of items that are injurious to our health. That is why alcoholic beverages are being taxed and we are collecting it. Tobacco is being taxed and we are collecting it….All other carbonated drinks are also injurious to our health.
“So if we tax tobacco and alcoholic beverages, I see no reason why we should not tax the carbonated drinks. We have said this for the past five years I have been on this seat, and up till today we have not been able to get it. The reason I don’t know.
“My submission is simple. We will continue to rely on the unpredictable atmosphere to collect as much revenue as we can, but for us to be precise and more predictable, we must pay more attention to our industries and extract excise from them. That would be more predictable and much more realisable.”
But lawmakers said such an action could lead to the total collapse of the manufacturing sector which is currently struggling to survive the harsh economic situation in the country.
The NNPC, in a presentation by its group managing director, Mr. Mele Kyari, said the corporation was spending most of its profit that should go into the federation account to subsidise the petrol which, according to him, is in billions of naira every day.
He also stated that huge percentage of the 60 million litres of the subsidised petrol being evacuated from the various NNPC depot does not represent the actual consumption saying it was being smuggled outside the country.
“Our efforts at raising revenue are being hampered by smuggling, round tripping, and other sharp practices.
“There is currently an inter agency collaboration to stop smuggling of the PMS but the reality is that the practice will continue in as much as there is a difference between the amount we sell in Nigeria and the price elsewhere.
“It is not beyond government but it is an extremely situation to manage. Any time the NNPC supply 60 million litres of PMS we will record shortage. As far as Sudan, you will see Nigerian subsidised PMS there and that’s the reality we are dealing with,” he said.
He also said the lack of market for the nation’s crude oil occasionally affects revenue and sometimes the projected oil benchmark.
The development, he said, had also forced Nigeria to embrace the OPEC resolution to cut down production so as to manage the prices in the international market.
Asked why the NNPC imports petrol at N250 per litre and sells at N162, Kyari said “not providing energy for Nigeria will be a breach of the law which establishes the NNPC.
“We will therefore continue to supply PMS to the Nigerian market at sub-market prices. What we have to do is to come back to the national assembly to see how the narrative could be changed.”
He also said the alternative was to sell at the real market price so that money spent on under recovery could be shared to the three tiers of government to build infrastructure and provide other social amenities.
With Premium Times report
