Federal Govt Approves the Recovery of N2.6tn Unpaid Debts

Federal Govt Approves the Recovery of N2.6tn Unpaid Debts

The President, Muhammadu Buhari, has approved the recovery of debts owed the federation by government agencies and oil and gas companies in the country’s extractive sector.

It was reported by another online media on September 29, 2021, that the indebtedness of 77 oil and gas companies in Nigeria was N2.66tn, according to data released by the Nigeria Extractive Industries Transparency Initiative.

The Chief Executive Officer, Nigeria Financial Intelligence Unit, Modibbo Tukur, in a statement issued in Abuja on Monday by NEITI, stated that Buhari had given approval for the recovery of the money.

The statement quoted him as saying, “The Minister of Finance, Budget and National Planning has been directed to constitute a recovery panel which will have as members, NEITI, EFCC, ICPC, Federal Inland Revenue Service and other relevant government agencies to look into the liabilities of operators in the extractive sector.”

It said that NEITI had signed a Memorandum of Understanding with the NFIU to share information and data to check fraud and other financial misconducts in the oil sector.

According to him, there would be a consolidation of the data coming from NEITI, NFIU and other anticorruption agencies when the recovery panel finally settles down to work.

He said “There will be very clear reconciliation with both the players and those regulating the sector, so no more hiding of national revenues.

“We have all seen the zeal. You are talking about N2.6tn unpaid. We at NFIU have reported over $5bn plus another N700bn not paid.”

“The NEITI reports based on findings in its 2019 audit of the oil and gas sector show that oil and gas companies in Nigeria owe government about $6.48bn, which equals N2.66tn at today’s exchange rate of N410.35.

The Executive Secretary of NEITI, Ogbonnaya Orji, in September commented on the debts owed by theoil companies. He said “A breakdown of the figures show that a total of $143.99m is owed as petroleum profit taxes, $1.089bn as company income taxes and $201.69m as education tax.

“Others include $18.46m and £972,000 as Value Added Tax, $23.91m and £997,000 as withholding tax, $4.357bn as royalty oil, $292.44m as royalty gas, while $270.187m and $41.86m were unremitted gas flare penalties and concession rentals respectively.”

“A comparative analysis of what this huge sum of N2.66tn can contribute to economic development shows that it could have covered the entire capital budget of the Federal Government in 2020 or even be used to service the Federal Government’s debt of $2.68bn in 2020,”

“In 2021, if the money is recovered the N2.66tn could fund about 46 per cent of Nigeria’s 2021 budget deficit of N5.6tn and is even higher than the entire projected oil revenue for 2021.”

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