Tax in the Daily

1.      NNPC yet to remit $1.48bn into Federation Account –FG
2.      Naira faces fresh pressure, falls to 222 per dollar
3.      E-taxpay: Promoting transparency in tax system
4.      Lagos, six states’ internal revenue dropped by N117bn in 2014
5.      FG, others share N409.354bn
6.      FG lifts ban on importation of furniture, textiles
7.      NEITI: N4.5trn Spent on Fuel Subsidy Can Build New Refineries
8.      As Buhari's Oil Sector Reform Gains EITI's Backing
9.      ‘$2.078b in Excess Crude Account’
10.   Standing firm amid financial storm
11.    FRC, multinationals fight over corporate governance code
12.    N4.9trn trade transactions expose Nigeria as unproductive economy
        13.  Nigerian states owe $3.3 bln

NNPC yet to remit $1.48bn into Federation Account –FG

June 24, 2015

Ifeanyi Onuba

Four Months after former President Goodluck Jonathan directed the Nigerian National Petroleum Corporation to refund $1.48bn (N291.56bn) into the Federation Account, the corporation has yet to do so.

An international audit firm, PricewaterhouseCoopers, was last year hired to carry out a forensic audit of the corporation following an allegation by the former Governor of the Central Bank of Nigeria, Lamido Sanusi, that $49bn was not remitted to the Federation Account by the NNPC.

Sanusi, who is now the Emir of Kano, had written a letter to Jonathan that the amount was not remitted to the Federation Account by the NNPC.

But following the controversy, which the letter generated, a committee was set up to reconcile the account.

Sanusi later recanted and said the unremitted fund was $12bn. He again changed the figure to $20bn.

PwC had stated in its report that while the total gross revenues generated from crude oil lifting was $69.34bn between January 2012 and July 2013 and not $67bn as earlier stated by the Senate Reconciliation Committee, what was remitted to the Federation Account was $50.81bn and not $47bn.

Within the $69.34bn, the audit report revealed that $28.22bn was the value of the domestic crude oil allocated to the NNPC, adding that the total amount spent on subsidy for Premium Motor Spirit amounted to $5.32bn.

But speaking on Tuesday shortly after this month’s Federation Account Allocation Committee meeting, the Permanent Secretary, Federal Ministry of Finance, Mrs. Anastacia Nwaobia, said no amount had been refunded as directed by Jonathan.

She said, “On refund from the NNPC, that was not discussed but you can see that from the breakdown, we have a refund of what we have been expecting from the NNPC to the Federal Government. We had a refund of about N6.33bn.

“The refund that you are asking about, maybe it is a fallout of the forensic audit; that has not been done. The forensic audit is still being considered and I am sure that when a decision is taken, it will be communicated and you will have that information.”

Speaking on the amount shared at the meeting, Nwaobia said the sum of N418.4bn was shared among the federal, states and local governments as revenue for the month of May.

She said that the shared amount comprised the month’s statutory revenue of N324bn and N6.3bn refunded by NNPC, being the corporation’s indebtedness to the federation before the release of the forensic audit report.

The permanent secretary said, “The gross revenue of N324.96bn received for the month was higher than the N282.06bn received in the previous month by N41.99bn. The distributable statutory revenue for the month is N324.06bn. The sum of N6.33bn was refunded by the NNPC to the Federal Government.

“Also, there was an exchange gain of N31.24bn, which is proposed for distribution. The total revenue distributable for the current month, including VAT, is N418.4bn.”

Giving the breakdown of the revenue shared among the three tiers of government, Nwaobia said after deducting the sum of N6.82bn as cost of collection, the Federal Government received N151.8bn, representing 52.68 per cent; states, N76.9bn, or 26.72 per cent of the total; while the local governments received N59.3bn, or 20.60 per cent of the amount distributed.

She announced that N29bn, representing 13 per cent derivation revenue, was also shared among the oil producing states.

Source: www.punchng.com/news/nnpc-yet-to-remit-1-48bn-into-federation-account-fg/
 
Naira faces fresh pressure, falls to 222 per dollar

JUNE 24, 2015

OYETUNJI ABIOYE

The naira, which rose to 180 against the dollar shortly after the inauguration of President Muhammadu Buhari about a month ago, has fallen to 222 at the parallel market due to a huge demand for dollars by importers and investors.

Increasing business activities have made importers and investors to move their foreign exchange demands to the parallel market, putting pressure on the naira at the segment, it was learnt on Tuesday.

The dollar was sold for between 220 and 222 on the streets of Lagos, Abuja and Kano on Tuesday, while the pounds and euro were sold for 350 and 249, respectively.

Analysts and foreign exchange dealers said the future of the naira looked bleak, at least at the parallel market.

The Central Bank of Nigeria has been depleting the external reserves in a bid to defend the local currency.

At the interbank forex market, where the central bank intervenes regularly to defend the currency, the naira closed at 199 against the dollar on Tuesday, data from the FMDQ OTC website showed.

The external reserves fell to $29.03bn on June 22, from $29.8bn on May 18, data from the CBN website showed.
Prior to the latest development, the foreign reserves had been stable for several weeks.

Economic and financial analysts said the latest movements in the external reserves meant that the naira was beginning to come under some fresh pressure.

Concerned about the depletion of the reserves, the CBN met with bank officials on Friday to discuss how to mitigate the pressure on the external reserves.

The CBN has yet to make the outcome of the meeting official but sources said the central bank wanted the banks’ cooperation in order to reduce the pressure on the reserves.

The bank officials, it was learnt, told the CBN that it needed to relax its rules in the forex market and allow the naira to find its level.

The officials, however, promised to take the deliberations at the meeting to the CBN Governor, Mr. Godwin Emefiele.

It is unclear if the CBN will accede to the demand of the banks to relax the rules in the forex market, but the spokesperson for the central bank, Mr. Ibrahim Mu’azu, could not be reached immediately for comments. Calls made to his mobile telephone line were not answered.

Last November, the CBN devalued the naira after spending several billions of dollars to defend the local currency.

The Acting National President, Association of Bureau De Change Operators, Alhaji Aminu Gwadabe, told our correspondent on Tuesday that the naira’s outlook at the parallel market looked bleak, forecasting that the currency might fall to 230 against the dollar in the coming weeks if the central bank failed to deploy measures to curb the increasing dollar demand at the parallel market.

He said, “There is pressure on the naira again. Maturing import bills are making the demand for dollars to rise again. Most importers and investors are saying they could not access dollar at the official market.

“They are now turning to the parallel market, a situation that is now fuelling the demand for dollar and other foreign currencies at the parallel market.”
The Head, Research and Investment, Afrinvest West Africa Limited, a research and investment advisory firm, Mr. Ayodeji Ebo, said, “The CBN needs to do something urgently otherwise it (slide in the value of the naira) will continue.

“If the pressure continues, the CBN may devalue the naira. I think the CBN is also waiting to see the plan of the new government in order to align its monetary policies with it. Once the new government comes up with its plan, the CBN may devalue the naira. If that is done, foreign investors who have been waiting on the sidelines will come in.”

Source: www.punchng.com/business/business-economy/naira-faces-fresh-pressure-falls-to-222-per-dollar/

e-taxpay: Promoting transparency in tax system

24th June 2015

Electronic-Taxpay is an online self-service tax payment system which gives taxpayers the opportunity to pay their taxes through their banks’ online payment portals. It is an initiative of FIRS in collaboration with Nigerian Interbank Settlement System (NIBSS). It is meant to facilitate payments of taxes from the comfort of taxpayers’ offices or homes. Taxpayers can pay using the electronic channels provided by their banks such as the banks’ internet banking platform, branches and mobile banking platforms.
 
Conditions to be met by taxpayer before using e-Taxpay platform

•Register and obtain your Taxpayer Identification Number (TIN)
• Have an account with any bank of your choice and subscribe to the internet banking function of your bank.
• Have sufficient funds in the account to cover the tax liability/transaction.

Steps to take to make payment through e-Taxpay platform

Having registered and received a TIN, an active internet banking account and sufficient funds, then;
• Decide the channel to use;
• If you decide on internet banking channel, log on to your bank’s internet banking platform e.g. GTBank Online Banking, FirstOnline, etc;
• In the case of GTBank Online Banking, select the “Payment” option in the menu;
• Then select “NIBSS E-Bills payments” under the “Payment” option;
• Select the account to debit from, to continue;
• Once inside the NIBSS E-Bills payments, select “New Request” to start a new payment. This will take you to the NIBSS platform;
• Then select “FIRS e-Taxpay” from the displayed list services that the NIBSS platform provides, in order to start the tax payment in particular;
• You then enter your TIN (FIRS/JTB-TIN) or the TIN of the taxpayer you want to pay for;
• Click “verify” to validate that the TIN belongs to the taxpayer making the payment;
• A pop-up will appear with the TIN details. If ok, then go to the next stage;
• Select the tax type (e.g. Company Income Tax, Pre-Operation Levy, Value Added Tax, etc.);
• Enter the amount to be debited (tax sum being paid);
• Accept service charge for the bank (if applicable);
• Confirm that all the information provided are correct and valid;
• Submit the request.

After a successful transaction, the system will generate an ‘e-acknowledgement’ which can be printed online, or sent to a specified e-mail address. The ‘e-acknowledgement’ is a confirmation of the transaction of payment of tax to FIRS which would be presented to FIRS field office for the issuance of statutory FIRS receipt to the taxpayer. A taxpayer should please ensure the ‘e-acknowledgement’ is submitted to the tax office of domicile to get a government tax receipt for the payment made.

Real time notifi-cations: The platform also notifies the taxpayer and FIRS through SMS alert and real time email. FIRS can view payment transactions and reports online, in real time.

Tax types that can be paid using the e-Taxpay channel:

e-Taxpay can be used to pay all tax types and levies collected by FIRS. They include:
• Petroleum Profit Tax (PPT)
• Education Tax (ET)
• Companies Income Tax (CIT)
• Value Added Tax (VAT)
• Personal Income Tax (PAYE for residents of FCT and non-Residents)
• Withholding Tax (WHT). This requires a schedule to be uploaded on the platform;
• National Information Technology Development Fund Levy (NITDEF)
• Capital Gains Tax (CGT)
• Pre-Operation Levy (POL)
• Stamp Duties (SD) and late filing penalty
Documentation required when the taxpayer wants to pay tax:
• Compute tax payable
• Fill the relevant self-assessment forms
• Prepare the relevant schedules
• Make the payment (CIT/PAYE/WHT/VAT).

Benefits of using e-Taxpay

•Promotes trans-parency in tax payment system;
• Boosts taxpayer con-fidence and trust in the tax system;
• Promotes voluntary compliance by taxpayers;
• Convenience, time and cost saving for the taxpayers as they can do it themselves within the confine of their offices without going to the banking hall.
• The platform is safe and secure.

Security of the e-Taxpay Platform

The e-Taxpay service is safe and secure. The e-Taxpay platform leverages on the security measures provided by the service channels of the banks in addition to that of NIBSS and FIRS.

Source: www.dailytrust.com.ng/daily/index.php/business/58037-e-taxpay-promoting-transparency-in-tax-system

Lagos, six states’ internal revenue dropped by N117bn in 2014

23rd June 2015

Francis Arinze Iloani

The Internally Generated Revenues (IGR) of Lagos and six other states in Nigeria dipped by N117.46 billion last year.

The six other states were Bauchi, Benue, Delta, Enugu, Katsina and Plateau States.

Daily Trust analysis of recent report released by the National Bureau of Statistics (NBS) detailing the IGR of states across Nigeria showed the affected states generated a total of N483.32 billion in 2013 but this figure plummeted to N365.86 billion in 2014.

The worst hit by the fiscal crisis was Lagos State as its IGR dropped by N108.10 billion last year.

Analysis of the recent report revealed that a total of 23 states generated N587.73 billion last year.

The amount translated to a decline of 14.62 percent when compared to N688.45 billion generated by the same states in the preceding year.

The report, which the NBS sourced from the Joint Tax Board and State Boards of Internal Revenue, did not include 13 states that were yet to submit their IGR reports for 2014 to the NBS.

The states that their IGRs were not captured were Abia, Adamawa, Borno, Cross River, Ebonyi, Edo, Gombe, Jigawa, Kano, Kwara, Ondo, Taraba and Yobe states.

Lagos generated N276.16 billion last year, an amount that was almost half of the N587.73 billion generated by the 23 states combined.

As seen in some states, Lagos IGR plummeted from N384.26 generated in 2013 to N276.16 billion in 2014. The two states following Lagos in terms of highest amount of IGR recorded in 2014 were Rivers and Delta with N89.11 billion and N42.82 billion respectively.

Rivers topped the South-South states in revenue generation in 2014 with N89.11 billion while Enugu, Kaduna, Bauchi, and Benue topped the Southeast, Northwest, Northeast and North-Central states with N19.25 billion, N12.78 billion, N4.85 billion, and N8.28 billion respectively.

The 2014 IGR report of Kano State, which is a major commercial city in Nigeria, was not included in the latest report but the state’s N17.14 billion IGR recorded in 2013 was lower than Lagos’ by N367.12 billion for the same period.

Lagos State’s IGR of N384.25 billion in 2013 exceeded the total sum generated by Akwa Ibom, Anambra, Bauchi, Bayelsa, Benue, Delta, Edo, Enugu, Katsina, Kebbi, Kogi, Kwara, Niger, Ondo, Plateau, Rivers, Taraba, Yobe and Zamfara States combined.

The 19 states put together generated N671.32 billion 2013, out of which Lagos had the lion’s share.

Meanwhile, the latest report also showed that the 23 states captured in the report generated N8.79 billion through road taxes last year.

Analysis of the report revealed that the amount of revenues generated by Lagos State alone through road taxation was higher than the amount generated by the other 22 states combined.

Out of the N8.79 billion generated by the states, Lagos had the lion’s share of N4.58 billion.

The latest IGR report is an indication that the fiscal crisis facing many states across Nigeria is not only connected to dwindling allocations from the federal government as a result of falling oil price.

The state Governors, through the Nigerian Governors Forum (NGF), had in a recent meeting resolved to approach the federal government for a fiscal bailout as some of the states can no longer pay salaries of their workers.

Source: www.dailytrust.com.ng/daily/index.php/business/57932-lagos-six-states-internal-revenue-dropped-by-n117bn-in-2014
FG, others share N409.354bn

June 24, 2015  

Emmanuel Elebeke

The three tiers of government, yesterday, shared a total sum of N 409.354 billion for the month of May.

This is made up of N324.061billion from statutory allocation, N56.04 billion from Value Added Tax, VAT, N6.330 billion as refund by the Nigeria National Petroleum Corporation, NNPC, to Federal Government, as well as the N31.240 billion exchange gain.

The amount represents N30.113 billion increase from the N388.339 billion shared in the month of April

A break-down of the distributions showed that the Federal Government got N151.805 billion from statutory allocation, which represents 52.68 per cent, while states and local governments received N76.998 billion and N59.362 billion respectively, representing 26.72 per cent and 20.60 per cent.

On Value Added Tax, VAT, the Federal Government received N182 billion, the states and local governments got N27.274 billion and N19.092 respectively.
On the other hand, the oil producing states shared N29.071 billion as the 13 per cent derivation against 23.109 billion shared in the previous month.

Briefing journalists at the end of the Federal Accounts Allocation Committee, FAAC, meeting, the Permanent Secretary in the Ministry of Finance, Mrs. Anastasia Nwaobia disclosed that the gross revenue of N324.061 billion received for the month was higher than the N282.062 billion received in April by N41.999 billion, due to the improvement from the refund to Federal and the exchange gain added to the revenue.

Nwaobia said Federal Government has taken steps to block all the identified leakages in the system and hoped that the source of revenue to government will continue to improve in coming months.

Under the excess crude account, ECA, she explained that the reserve stood at 2.78 billion dollars as at yesterday, from which they had the refund of N6.360 billion.

Commenting on the $1.18 billion dollar missing from the NNPC forensic audit report, she said the “matter is being considered and when decision is taken, information will be made public on it.”

On why they could not hold FAAC meeting, last week, the permanent secretary said the meeting could not hold due to some reasons, some of which was that the minister and commissioners were no longer there and that the Accountant General of the Federation exited office on June 12.

On the issue of Federal Government owing salaries, she dismissed the claim, saying that there was no agency nor ministry owed by Federal Government and expressed hope that states owing salaries would pay their workers accordingly after this FAAC meeting.

Source: www.vanguardngr.com/2015/06/fg-others-share-n409-354bn/

FG lifts ban on importation of furniture, textiles

23rd June, 2015  

Godwin Oritse & Chizoba Nwaizu

THE Federal Government has lifted the embargo on the importation of textile materials into the country. Confirming this in Lagos yesterday, the Comptroller-General of the Nigeria Customs Service, (NCS), Alhaji Abdullahi Dikko said that Nigerians can now import textile materials subject to payment of right duty.

Speaking at the official launching of the implementation of Economic Community of West Africa States, (ECOWAS), Common External Tariff, (CET), Dikko said 
that the items were removed from the prohibition list in line with the laws guiding the CET regime. “Textile, furniture and others have become dutiable as both commodities have been removed from the Import Prohibition Lists and it is going to be implemented” said Abdullahi Dikko.

The Customs boss, who was represented by Victor Gbemudu, Assistant Comptroller General, Zone ‘A’, said that importers of these goods are now expected to pay 35 percent duty as agreed by ECOWAS member countries as well as the levy as contained in the Import Adjustment Tax (IAT).

“CET also comes with some adjustments for member countries. There are 97 chapters with the 5,899 tariff headings but every member country is entitled to 3 percent adjustment. “This 3 percent adjustment translates into 177 tariff headings to enable member countries to protect their local industries.”

Gbemudu said these items were banned because the government wanted to protect the local industries involved in the manufacturing of these goods. He also promised that by 2020, there would no longer be any item on the import prohibition list as everything would have been harmonized. He said that the CET is subject to review every five years.

He however said that poultry products still remain banned as government cannot allow their importation from outside the country. “If you go through the Common External Tariff you will see that a lot of items have been removed from the prohibition list and it is going to be implemented; mostly, furniture, textiles and the rest of them, most of them will now pay duty and will have Import Adjustment Tax (IAT)”

“The CET is not new, it embraces about 15 countries which includes Nigeria, all we are just doing is to bring stakeholders to understand what the CET is all about and to a large extent it comes with some adjustments for member countries”, he explained.

Speaking on the advantage of the CET on Nigerian economy, Gbemudu assured that there would no longer be policy somersault on importation, saying that importers can now project and plan five years ahead since the duty payable will remain the same. He charged stakeholders not to blame the Customs or the federal government for any inconveniences occasioned by the implementation of CET, saying that it is not peculiar to Nigeria, but that it is a regional thing.

Gbemudu said that  customs introduced the Import Adjustment Tax (IAT) in order to protect certain policies of government such as the sugar policy, agricultural policy, solid mineral policy among others.

The new CET regime according to an official of the tariff will eventually lead to consolidated regional market while stimulating regional production capacity and deepening economic integration. It will recalled that the Federal Government banned these items in 2010 with a view to growing the local industries.

Source: www.vanguardngr.com/2015/06/fg-lifts-ban-on-importation-of-furniture-textiles/

NEITI: N4.5trn Spent on Fuel Subsidy Can Build New Refineries

23rd Jun 2015

Chineme Okafor

The Nigeria Extractive Industries Transparency Initiative (NEITI) has reiterated its position that the federal government’s continuous application of scarce funds to subsidise domestic consumption of petrol is not sustainable.

The Executive Secretary of NEITI, Mrs. Zainab Ahmed, who reinstated NEITI’s position during a recent visit of the international Chair of the Extractive Industries Transparency Initiative (EITI), Clare Short in Abuja, noted that the time for the federal government to remove oil subsidy has come.

Citing the last NEITI audit report of 2012, Ahmed said a total of N1.355 trillion was processed for payment as subsidy but that N690 billion was actually paid out, thus inflicting a debt burden of N665 billion on the federal government.

She explained that NEITI’s position remains that the amount of funds so far expended on petrol subsidy is more than enough to repair Nigeria’s four refineries in Port Harcourt, Warri and Kaduna or even build new ones.

“From our reports, the amount of money that Nigeria has paid so far on subsidy in the last seven years stand at N4.5 trillion,” she said.

“The breakdown shows that N816.554 billion was paid between 2006 to 2008, N3 trillion between 2009 and 2011 and N690 billion in 2012. We in NEITI believe that this amount is more than enough to repair our refineries or build new ones. NEITI therefore stands firmly with Nigerians who share the fair position that the oil subsidy should be removed,” she added.

NEITI had in its 2012 audit report which was released in March stated that out of the 46 marketers given approval to import petrol in 2012 into the country, a few of the companies had performed below average while four of them did not import any petroleum products at all.

It thus recommended that the four marketers should be appropriately penalised and blacklisted from future participation in the import process if it is confirmed that they received foreign exchange for product importation without supplying products.

NEITI also requested that the Petroleum Products Pricing Regulatory Agency (PPPRA) should review the future participation of the companies that performed poorly, adding that the post-payment audit system should be adjusted to ensure that vetting by independent auditor is carried out before payment.

“There is also the need for increased coordination of all the activities of government agencies involved in the subsidy process. PPPRA should ensure strict adherence to the rules in the subsidy determination process and appropriate penalties for breaches should be enforced.

After the 2012 fuel subsidy probe by the National Assembly, the PPPRA management appears to have put together some reform policy initiatives to strengthen the process of petroleum product importation and also ensure a sanitised system. The initiatives should be fine-tuned and information need to be timely shared 
between all the agencies involved in subsidy determination including the Nigerian National Petroleum Corporation (NNPC),” NEITI explained in the audit report.

Source: www.google.com/url?q=http://www.thisdaylive.com/articles/neiti-n4-5trn-spent-on-fuel-subsidy-can-build-new-refineries/

As Buhari’s Oil Sector Reform Gains EITI’s Backing

23rd Jun 2015

Chairperson of the global Extractive Industries Transparency Initiative, Clare Short indicated during her recent visit to Nigeria that the body will stand with Nigeria’s new government to reform her extractive industries. Chineme Okafor writes.

As it is a norm across climes, changes in government or regime have always come with great expectations.

Nigeria’s recent transition in government isn’t an exception, hence the renewed interests of the global Extractive Industries Transparency Initiative (EITI) in demanding for long due changes in Nigeria’s extractive industries.

Welcoming with optimism, the possibility of a strong-willed drive in reform of Nigeria’s extractive sectors as pledged by the new government of President Muhammadu Buhari, the chairperson of EITI, Clare Short disclosed that the movement will stand with Nigeria in its reform quests.

EITI, a global standard to promote open and accountable management of natural resources, seeks to strengthen government and company systems, inform public debate, and enhance trust in use of revenues from extractive industries.

Each of the 50 EITI implementing countries including Nigeria is supported by a coalition of governments, companies and civil society working together to advance the principles professed by the movement.

Because natural resources, such as oil, gas, metals and minerals in a country belong to its people, their extraction by entities is expected to lead to economic growth and social development, however, when poorly managed, these resources have too often encouraged and sustained corruption and even conflict especially in some African countries.

EITI in its belief therefore posits that more openness around how a country manages its natural resource wealth is necessary to ensure that these resources can benefit all citizens.

In her consultation with stakeholders in Nigeria’s extractive sector including Vice President Yemi Osibanjo, and members of the Inter Ministerial Task Team (IMTT) set up for the implementation of findings and recommendations in the audit reports on operations in Nigeria’s extractive sectors, Short reminded Nigeria of the dire need for her to reform her extractive sectors.

She explained that more often than necessary, Nigeria has pushed back overdue reforms, which ordinarily should come with audit reports on the sector, which 
are usually commissioned by the Nigeria Extractive Industries Transparency Initiative (NEITI), but stated that Nigeria perhaps has a good opportunity with Buhari to reform her extractive sectors using NEITI’s reports now.

Short noted that as a basis for its proposed reform in the extractive industry, the government through NEITI’s audit reports has a good and swift option to rely on, adding that this forecloses the possibilities of new requests or analysis to identify the challenges of the sectors.

“EITI has faith in the new administration in Nigeria. We are ready to work with the new government to reform the oil sector and NEITI independent reports in the sector will help to lead the way. I am in Nigeria to convey our support to President Buhari,” Short said while asking the new government to expand the processes for implementing audit reports released by NEITI.

Flowing from the amount of work that NEITI has put in over the years since its establishment in 2004 to amongst its tasks put in the public domain reliable information and data on the process and financial lapses that need to be addressed if Nigerians are to benefit from the abundant natural resources in the country, EITI requested the government to live through its pledge in good time.

Unfortunately, NEITI’s information and data on operations in Nigeria’s extractive industries have failed to attract serious consideration by past governments who have not considered them good enough for use in reforming the sectors.

This is despite common knowledge that Nigeria’s extractive sector is riddled with all sorts of operational disorder including poor accountability and transparency regimes, yet governments have come and gone since the inception of NEITI with no palpable efforts to implement the recommendations reached in NEITI’s reports.

And time and time again, NEITI from its daring audits and reports of operations in the country’s extractive sectors has always found itself muddled up in needless controversies with covered entities over its findings and presentation of same to engender public debates on them.

But even though it has got very little government backing to implement such findings, NEITI has never reported any government infractions on its job, thus keeping the credibility of its audit findings intact.

Reform ball in Buhari’s court

Following from these extant challenges and Nigeria’s peculiar situation, EITI however feels that President Buhari now holds the ace to drive reforms in the extractive sectors.

In her meeting with stakeholders, Short confirmed that feelings of EITI countries that Nigeria was perhaps on the path to enthrone good governance practices in the management of her extractive sectors.

She stated that Buhari from NEITI’s offerings was better equipped with the right information to undertake his pledged reform of Nigeria’s extractive sector, comprising of her oil and gas sector and should not waste time in doing this.

Short told reporters that Buhari would have to seize the momentum he gained in clinching the votes of Nigerians at the presidential polls to initiate his reform, saying that he would not need to re-invent the wheel in his stated intent to reform the country’s extractive sectors but only have to take up sound suggestions contained in the various audit reports of NEITI.

According to her, with NEITI’s audit reports and its recommendations readily available, Buhari could be very well placed to reform the extractive sectors of the country. She added that everyone expects Nigeria’s oil to work for her citizens and Buhari to live up to his pledge of reforms.

“I think the new government is very well placed because of the amount of work that NEITI has done and this inter-ministerial taskforce, so that the reform agenda is spelt well and clear,” Short said.

She further explained: “The new government doesn’t have to start making new analysis or looking at what possible reforms it can make, it can pick up the reform agenda and drive it forward very quickly and that makes it a very important opportunity in building on the works that had been done in the past but hasn’t been fully implemented.”

“We hope and expect that the new government will be able to pick up the analysis, work with the people, with the works that have already been done in the agencies and really drive forward significant reforms that will turn this rich oil and gas mining resources in Nigeria into a real blessing for the people.
It is a crucial time and we are very optimistic that Nigeria is going to make it going forward,” Short noted.

Poor use of reports

NEITI no doubt has complained of the poor use of its reports to demand for accountability in the extractive sectors. The federal government comprising the executive and legislative arms are the major culprits in this act.

Parties found guilty of perpetrating unethical acts in the audit reports have often played hard to catch in NEITI’s attempts to implement its audit findings using the IMTT. This is partly because the executive arm of government headed by the president has repeatedly failed to throw its weight behind the implementation exercise.

The national legislators who were mandated by the NEITI Act 2007 to deliberate and take a stand on each of the audit findings of NEITI, with a view to enacting laws that will further transparency in the sector, have also refused intensely to publicly debate on these findings in their chambers.
Short however called for a change of this practice, adding that such weak implementation should not be condoned by Buhari.

“In the past, implementation of the recommendations has been weak but now with your new government and the feelings of the people that are angry that this sector is not better managed for their benefit, there is a real opportunity with the analysis that NEITI has done to drive through reforms that would really lead to a better management of the sector for distribution of resources and more benefit to the people,” she said.

According to her: “Recommendations in the reports have not be carried through in the past, the new government says it wants to reform this sector, NEITI’s analysis give it a real opportunity to pick up recommendations and drive it all forward and it is a real challenge, not like a new government coming to say we want to reform and then may have to start examining where the problem is, that part of the job has been done and the authorities in government can then drive the reform and really make a difference right now.”

Assured support from EITI

Considering NEITI’s innovative approach to exposing outstanding debts by operators to the federal government, recovering of uncollected taxes, identification of weaknesses in the regulatory bodies, audited oil-related transfers to subnational government, estimated oil theft, and examined oil sales, the governing body of EITI has indicated its willingness to help deepen the processes in Nigeria.

Short in this regard stated that the global extractive transparency movement will continue to look out for the government’s execution of its pledged reforms in the sectors, adding that emphasis must be laid on achieving reforms and not just publishing audit reports of operations.

She said that the government must be willing to wield the big stick in demanding for its laws in the extractive sector to be respected by stakeholders.

“Sanctions are in the hands of the government of Nigeria to enforce its contracts, its rules, its expectations and make sure all the companies pay properly,” Short said on sanctions for operators who have reportedly failed to remit monies due to the government from their operations in the sector.

Nigeria’s willingness to include novel updates in her advancement of accountability in the extractive sector like the introduction of the beneficial ownership pilot project and tracking of disbursed funds to beneficiary entities have also placed the country as a serious member of EITI, accepting EITI’s hand of fellowship in its reform of the extractive sector would be an added advantage to the new government of President Buhari.

Source: www.google.com/url?q=http://www.thisdaylive.com/articles/as-buhari-s-oil-sector-reform-gains-eiti-s-backing/
$2.078b in Excess Crude Account’

Nduka Chiejina

The cash in the Excess Crude Account (ECA) is $2.078 billion, the Permanent Secretary, Federal Ministry of Finance, Mrs Anastasia Nwaobia, said yesterday.

Mrs Nwaobia, who addressed reporters after the monthly Federation Account Allocation Committee (FAAC) meeting in Abuja, said the Nigerian National Petroleum Corporation (NNPC) has not refunded the $1.48 billion it was directed to refund to the nation’s coffers as recommended after the forensic audit of the alleged missing cash from the Federation Account.

The meeting was attended by the permanent secretaries of the states and the acting Accountant General of the Federation.

She attributed the delay in this month’s FAAC meeting to the transition of power in many states of the federation which has made many states not to form executive councils. She added that the Accountant General of the Federation (AGF) also exited on the June 12 while Directors and Accountants in the AGF’s office were sitting for qualifying examination to occupy the office following the exit of the past AGF.

The Federal Government, the states and local governments shared N409.354 billion from the Federation Account for the month of May. This is slightly higher than the N388.339 billion shared for April.

While the Federal Government got N151.805 billion, state got N76.998 billion; local governments gott  N59.362 billion. Another N29.071 billion was distributed as 13 per cent derivation to the oil producing states.

For Value Added Tax (VAT), the Federal Government got N8.182 billion, state governments got N27.274 while local governments received N19.092 billion. A cash of N31.240 billion was shared among the federal, state and local governments as exchange gains proceeds while the Federal Government received an additional N6.330 billion as refund from the NNPC.

The collecting agencies’ allocations got allocations in the following order: Federal Inland Revenue Service (FIRS)-N2.403 billion as four per cent of collecting what went in for statutory allocations, the Nigerian Customs Service (NCS) received N2.881 billion as seven per cent of cost of collection and the Department of Petroleum Resources (DPR) collected N1.541 as its cost of collection. For VAT, the FIRS collected an additional N2.273 billion as its four per cent cost of collecting VAT.

Mrs. Nwaobia said the gross revenue of N324.061 billion received for the month was higher than the N282.062 billion received in the previous month by N41.999 billion.

She attributed this increase to an “improvement in the bulk revenue that came from exchange gains on foreign exchange transaction because the exchange rate has been steady and higher than the benchmark exchange rate projected for the year.”

However, she said delays in issuance of this year’s third quarter export permit led to a drop of about 160,000 barrels per day (bpd) in April and that the shut down and shut-in of trunks and pipelines at terminals also continued to impact negatively on crude oil revenue.

An increase in the average price of crude oil from $56.04 in March to $59.88 in April she said, brought about $19.70 million gain in revenue. Government she explained, “is making efforts to block leakages and we hope that revenue will continue to improve.”

The permanent secretary said the non-oil revenues are expected to perform better in the latter part of this year due to some mechanisms put in place by the FIRS.

Mrs Nwaobia dismissed claims that the Federal Government was owing federal workers’ salaries stating that the ministry plans to fund the relevant account next week so that federal workers will receive their next salaries.

Source: www.thenationonlineng.net/new/2-078b-in-excess-crude-account/
Standing firm amid financial storm

Despite the cash crunch triggered by dwindling allocations from the Federation Account, some governments have been able to stay afloat with regular payment of salaries, even as other projects suffer, report Mike Odiegwu (Bayelsa), Abdulgafar Alabelewe (Kaduna), Chris Orji (Enugu), Miriam Ekene-Okoro (Lagos) and Friday Otabor (Edo). 

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