OPINION: Does Nigeria Need a Revenue Crisis? – by Leonard Shilgba

Published:9 Nov, 2012

OPINION: Does Nigeria Need a Revenue Crisis? – by Leonard Shilgba

I am thinking about a situation when crude oil prices do not exceed 40 US dollars a barrel and the demand for Nigeria’s oil drops, partly because the US (a country that imports about 40 percent of Nigeria’s crude oil) cuts down significantly on imports of the product from Nigeria as from other exporters of crude oil to that country. I am thinking about the time when the game that our rulers engage in so blatantly with impunity, which is called Oil Bunkering, turns out to become more deadly than we are made to believe. I look forward to that situation when the revenue of Nigeria cannot support the constitutional allowances and remunerations that Nigeria’s rulers award themselves. Would it not be interesting to see scavengers of Abuja scamper away because the honey pot is wiped clean? Board members of many redundant and unprofitable government corporations shall find nothing to satisfy their lusts with. State governors shall be hard pressed for their lack of ingenuity and creativity as they cannot cope with riots in their states caused by a genuine inability to pay the salaries of generally unproductive government workers. Abuja cannot help then. The center will not hold, and the attraction of this union shall rapidly wither away.

Since I was a young boy I have heard the idle affirmation of Nigerian rulers about “the need to diversify the economy.” But where is the will or the motivation? The will is not there in our rulers because there is no necessity; and there is no necessity while the black gold flows continually and customers are not lacking, who are willing to provide the soliloquizing pill to deaden any sensitivity towards the danger the country faces should it continue to rely heavily on one product as a major revenue source. I should think that Nigerians who know about the real and potent trials of the present lack of patriotic governance ought to ponder ways to bring about the right deeds of governance or force them.

The 2013 federal budget proposal that has already been presented to the national legislature by President Jonathan reveals three present problems with Nigeria: First, the amount of revenue Nigeria should legitimately expect next year is not fully covered in the proposal. Two, the federal government is still acting as though there is no urgency for increased capital votes for expenditure on infrastructural development, education for the future challenges of new technology, welfare programs such as public housing in partnership with local governments (See the fourth schedule of the 1999 constitution which makes building and maintenance of houses for the poor and infirm mandatory for local councils), and on strategic partnership with state governments on projects and programs that will reduce unemployment. Three, there is no evidence that the federal government is eager to cut down on big government by implementing the recommendations of the Orosanya’s committee it had set up, which include either complete scrapping of redundant departments and agencies or merging some of them that perform duplicate functions. The budget proposal is silent on shrinking of the size of government in any form or shape.

Let us take the average price for crude oil for 2012, which is about 100 US dollars per barrel. If we assume this average for 2013 also and the proposed crude oil production of about 2.5 million barrels a day in 2013, an income of 250 million US dollars a day for Nigeria and oil companies is expected. According to Dr. Ngozi Iweala, Nigeria’s Minister of Finance, 57 percent of crude oil money goes to Nigeria while the oil companies take 43 percent. This translates to about 52 billion US dollars for Nigeria or 8.1 trillion naira. If the revenue collected by the Federal Inland Revenue Service (FIRS) so far in 2012 is considered as a benchmark (FIRS announced tax revenues of 3.81 trillion naira by October 2012, with one more quarter to go) for 2013, we can safely conclude that the total estimated revenue available to Nigeria from crude oil sales and taxes collected by FIRS in 2013 is more than 12 trillion naira. But President Jonathan laid before Nigerians a budget proposal for 2013 with a declaration that estimated revenue accruable to Nigeria in 2013 was only 10 trillion naira, out of which the federal government’s share was about 3.9 trillion naira. I am concerned about the math here; it just does not add up! Secondly, the president was silent about revenue from Nigeria’s investment in gas (the NLNG project). Nigeria controls 49 percent of the NLNG project and produces about 10 percent of world’s gas production. Why has the Jonathan government kept the revenue from gas sales from its employers, the Nigerian people? This lack of transparency is not acceptable, and our legislators must ask those relevant questions. They must unearth revenues that the federal government keeps away from both the state and local governments. An insidious conspiracy of fudging figures is going on while Nigerians who know don’t talk and those who don’t know don’t ask. Nigeria does not need and cannot afford a deficit of about 1 trillion naira while insufficient information is given about the true size of Nigeria’s expected revenue.

Does Nigeria need a revenue crisis to reveal information about our genuine revenues that is kept from our prying eyes? We are told how 400,000 barrels of crude oil are stolen daily! Don’t we have government anymore, or are those figures spouted out just to hide what is stolen by the kleptomaniacs in public office under some innocuous headings? Most probably, it would not move relevant government officials to resign, and neither would they lose their jobs should that figure rise to even 1 million barrels a day in the near future. The secrecy about our nation’s revenues, which is continually being spun by the PDP government, has come to be accepted as a difficult mathematical open problem that no polymath is presently inclined to consider. We must consider this problem. We need to resolve this seeming puzzle.

Do you know that the federal government proposes only 1.5 trillion for capital expenditure in the 2013 budget? And do you know that 1.03 trillion naira is the deficit? What that means is that only about 500 billion naira out of the revenues of Nigeria will be spent on things that Nigeria needs to meet the Millennium Development Goals (MDG). If you don’t cringe then I wonder if you understand what I am talking about. Our legislators need to get experts to educate them about the futility of Mr. Jonathan’s budget proposal; how it lacks truthfulness, vision, rationality, and transparency. A revenue crisis may hit Nigeria very soon, and necessity shall be placed on Nigerians to choose leaders who have a heart for the people. We can’t afford anymore leaders who are never alarmed by their incompetence and lack of empathy for the people.

 

Leonard Shilgba is an Associate Professor of Mathematics with the American University of Nigeria (www.aun.edu.ng ) and Chair of the Middle Belt Alliance (www.middlebeltalliance.org )

Email: shilgba@middlebeltalliance.org

Related Posts

Recent Posts

PDP Crisis Deepens As BoT Defies NWC, Sacks Chairman

The crisis in Nigeria’s major opposition party, the Peoples Democratic Party, deepened Wednesday as the Board of Trustees, BoT, held its meeting, thereby defying the decision of the National Working Committee that all meetings of the organs of the party be shifted to next week. The spokesperson of the party, Olisa Metuh, had on Monday issued a statement saying the meeting of the National Caucus of the party had been shifted to Monday next week, while...

189 Shiite Members Remanded In Prison

Some 189 Shiite members, who thought they could be granted bail on Wednesday, had their hopes dashed, as a Kaduna Magistrate Court remanded them in prison. The members of the Islamic Movement in Nigeria were arrested during the December 12, 2015 clash with the army in Zaria. The bloody clash reportedly claimed hundreds of lives.  Already a 13-man Judicial Commission of Inquiry had been set up by the Kaduna State Government to unravel the circumstances...

Kourtney Kardashian & Kylie Jenner Hit New York

The Kardashian sisters take New York fiercely. Kourtney Kardashian and little sister, Kylie Jenner, storm New York wearing furry coats and killer boots. Now we have no idea what they are up to but bet we will find out soon. The sisters both shared these photos on their Instagram pages. See photos below:

Buhari Arrives Abuja From London (PHOTOS)

President Mohammadu Buhari has returned from his brief vacation. The President landed Abuja this night from London. His official photographer, Bayo Omoboriowo, shared these photos on his Instagram page. See photos below:

51 Feared Dead In Dikwa Suicide Attack

At least 51 people died in a suicide bomb attack in Dikwa, a local council in Borno State, villagers say. Seventy-eight injured persons have also been evacuated to Maiduguri, the capital city for treatment. A mass burial has already been conducted for the deceased victims, mostly women and children. Dikwa, 80 kilometres from Maiduguri, once occupied by the Boko Haram terrorists, was declared liberated by the Nigerian Army since July last year. Credit:...

Alleged Bribe: Otedola To Testify Against Farouk Lawan

Billionaire businessman, Mr. Femi Otedola, has been scheduled to appear as a prosecution witness before a Federal Capital Territory High Court in Lugbe, Abuja, in the ongoing trial of a former Chairman, House of Representatives Ad-hoc Committee on Fuel Subsidy, Mr. Farouk Lawan, for alleged bribery. The Independent Corrupt Practices and other related offences Commission is prosecuting Lawan for allegedly “corruptly” collecting $500,000 out of the $3m bribe he requested from Otedola in exchange for the...

Local Vehicle Manufacturer IVM Makes Parts For Nigerian Jet Fighters

Chief of the Air Staff, Air Vice Marshal Sadique Baba Abubakar has applauded the management of Innoson Vehicle Manufacturing Company for its support to the military by providing technical support that has enabled the Nigerian Air Force to sustain its operations against the Boko Haram insurgents. The Air Force revealed on Wednesday, that Innoson ‘helped to locally modify and overhaul the brake assembly of the MB-339 aircraft for adoption on the Alpha Jets’ and also ‘helped...

Nigerian Army Busts Boko Haram Fuel, Ammunition Supply Chain

The Nigerian Army said it ambushed Boko Haram insurgents and killed a number of them while transporting fuel and various calibre of ammunition to their hideout. A statement by the spokesman of the Nigerian Army, Sani Usman, said the troops, while on operation at a cattle market on Wednesday morning, intercepted the insurgents and seized the supplies. “In continuation of their clearance operations of remnants of Boko Haram terrorists in the North East, troops of...

CPC Orders MTN To Pay N1.85m To Subscriber Within 14 Days

The Consumer Protection Council on Wednesday directed MTN Communications Limited to pay within 14 days the sum of N1.85m to one of the winners of its Ultimate Wonder Promo for lack of due diligence. The council’s order came on the heels of a complaint brought by Mr. Omeje Fidelis against the telecommunications company alleging that he had been underpaid after he was declared winner of N2m in the said sales promotion, which was held in 2012.

FG Moves To Secure List Of Properties Owned By Nigerians In Dubai

Few weeks after President Muhammadu Buhari’s visit to the United Arab Emirates (UAE), the federal government has revealed that efforts were in top gear to secure a list of Nigerians who owned choice properties in the country from proceeds of fraud.  Minister of Foreign Affairs, Mr. Geoffrey Onyeama, while briefing the Senate Committee on Foreign Affairs during the budget defence of the ministry, said the Nigerian government was in talks with...

Troops Arrest Mastermind Of Agip Pipelines Bombing

Troops of the Joint Force in the Niger Delta, Operation Pulo Shield, say they have arrested the suspected mastermind of the bombing of pipelines belonging to Nigerian Agip Oil Company in Bayelsa State. Agip oil pipelines located in Orukari, Golubokiri and Kpongbokiri communities of Brass Local Government Area of the state had been bombed on January 28. The dynamite attacks on the pipelines had resulted in massive spillage of crude oil from the Agip pipelines...

Savings From Fuel Subsidy Removal Rises To N647m Daily

Nigeria, as at yesterday, is currently saving N647.2 million daily from the suspension of subsidy on Premium Motor Spirit, also known as petrol. Particularly, at the current price of N86.50 per litre in petrol stations across the country, the country is making an extra N16.18 per litre. The Federal Government had stated that this extra savings is kept in an escrow account to serve as a cushion in case of eventuality, such as if the price...

Nigeria To Reward Best Performing Civil Servants, Sanction Under Performers

The Head of Service of the Federation Winifred Oyo-Ita, on Wednesday said government had resolved to reward best performing civil servants and sanction under-performing ones, with a view to ensuring effective service delivery. Mrs. Oyo-Ita said in a statement that the service would be enhanced to improve personnel structure and Performance Management System (PMS), with the introduction of reward for hard work as well as sanctions for poor performance. The head of service said the...

Imo State Recalls Suspended Workers To End Protests

The Imo State government has recalled workers it suspended in 19 parastatals in the state, ending the disagreement between the government and labour unions on the issue. The decision was reached on Wednesday after a meeting between the State government officials and some leaders of the labour unions. In an agreement signed after talks by the ‘Committee on Joint Government-Labour Negotiation in Imo State’, an immediate recall of all suspended workers of Imo State was recommended,...

INEC To Prosecute Under-age Voters

The Independent National Electoral Commission (INEC) said on Wednesday that it would prosecute under-age voters in Plateau.   Dr Godwin Kwanga, the Resident Electoral Commissioner (REC) of INEC in the state made this known in a Stakeholders’ Forum in Jos ahead of re-run elections in the state fixed for Feb. 20.   Kwanga said that the state was replete with underage voters in possession of Permanent Voter Cards (PVCs).   The stakeholders at the forum included representatives of security agencies, politicians, media and election monitoring...

Tunisia Makes $500 Million From Ousted President’s Assets

Tunisia has made nearly half a billion dollars from the sale of assets confiscated from ousted president Zine El Abidine Ben Ali and his allies, a minister said Wednesday.   In the months following Ben Ali’s flight to Saudi Arabia after the January 2011 revolution that ended his rule, the cash-strapped country seized hundreds of businesses, properties, luxury cars and jewellery belonging to him, his family and his allies. “Since 2011, we made around 1.5 billion dinars (of which) around 1...

Abia Senatorial Rerun : APGA Candidate Writes Kalu On Peaceful Election

Chief David Onuoha-Bourdex, the APGA candidate in the Abia North Senatorial rerun has written to an opponent, Dr. Orji Kalu of Progressive People’s Alliance (PPA) on peaceful polls.   In the letter addressed to Kalu, a former governor of the state, Onuoha-Bourdex underscored the need for all parties to the rerun to play the game according to rules.   The letter dated Feb. 5 and copies made available to newsmen on Wednesday in Abuja, the APGA candidate said that the peace of the...

NUT Demands Immediate Payment Of Teachers

The Nigeria Union of Teachers (NUT) has urged state governments owing teachers’ salaries to pay immediately, to ensure industrial peace.   The union made the call in a statement signed by Mr Obong I.J. Obong, the NUT General Secretary, and made available to the News Agency of Nigeria (NAN) on Wednesday in Abuja.   It urged such state governments to be alive to their responsibilities and stop toying with the future of the Nigerian child.   "We call on these state governments to be alive...

Internet Users Reduced By 788,215 In December 2015 – NCC

The Nigerian Communications Commission (NCC) on Wednesday said that internet users on Nigeria's telecoms’ networks reduced by 788,215 in December 2015.   The telecoms’ regulatory body disclosed this in its Monthly Internet Subscriber Data obtained by the News Agency of Nigeria (NAN) in Lagos.   The data revealed that users on both Global System for Mobile communications (GSM) and Code Division Multiple Access (CDMA) networks stood at 97,182,014 as at December 2015.   According to NCC, this was in contrast to 97,970,229 internet subscribers recorded...

Forex Policy To Stabilise Capital Market – Financial Experts

Some financial experts on Wednesday in Lagos said that the Federal Government’s foreign exchange policy not to devalue the naira would stabilise the nation’s capital market at the long run.   They told the News Agency of Nigeria (NAN) that the decision had reduced activities of speculators and capital flight at the Nigerian Stock Exchange (NSE).   They maintained that the forex policy stance had reduced activities of speculators in the form of portfolio investors in the market.   Alhaji Rasheed Yusuuf, the Managing Director,...

FG To Save N4.14bn On Travels Yearly Through Efficiency Unit

Mrs Kemi Adeosun, the Minister of Finance, on Wednesday said that government would save N4.14 billion from the Efficiency Unit on travels yearly with appropriate streamlining of the procurement process.   Adeosun made the disclosure at the Efficiency Unit’s media round table held in Lagos.   The News Agency of Nigeria (NAN) reports that the minister was represented by Mrs Patience Oniha, Head of the Efficiency Unit.   She said that government would save N4.14 billion annually "if a price discount of five per cent...