Tag Archives: NEITI

Lagos generated N300Bn as IGR in one year, higher than 33 states combined – NEITI

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The internally generated revenue (IGR) of Lagos state rose by approximately N33 billion from 2015 to 2016, beating 33 states put together.

According to a report by the Nigeria Extractive Industries Transparency Initiative (NEITI), the state recorded an IGR of N301.19 billion, a rise of N32.99 billion in one year.

The total IGR from 33 states of the federation, excluding Delta, Ogun and Rivers states stood at N299 billion — over a billion less than Lagos IGR.

Delta, Ogun and Rivers raked in N44.89 billion, N56.30 billion and N82.10 billion respectively.

Like his predecessors, Bola Tinubu and Babatunde Fashola, Akinwunmi Ambode, governor of Lagos state,  has at various times committed himself to the generation of IGR in the state.

The NEITI report, which reviewed disbursements from the Federation Account Allocation Committee (FAAC) for the fourth quarter of 2016, also showed that Lagos received N109 billion in 2016.

The agency lamented low revenue generation across 34 states, citing Lagos and Ogun as the only states generating more than what they get from the central.

“IGR is very low in most states and it is only in two states – Lagos and Ogun – that IGR is higher than FAAC allocations. The figure shows that total revenue by itself cannot fund states budgets,” it said.

NEITI said the three tiers of government shared N5.121 trillion through 2016 — a decline from 2015 figures.

“Total disbursements fell by 14.8% from N6.011 trillion for the year 2015 to N5.121 trillion for the 2016. In Q1 2016, total disbursements were N1.132 trillion as against N1.648 trillion in Q1 2015, a decline of 31.2% in Q1 2016,” NEITI said.

“Total disbursements fell by 26.9% from N1.241 trillion in Q2 2015 to N906 billion in Q2 2016. There was a further decline in Q3 when total disbursements dropped by 7.8% from N1.887 trillion in 2015 to N1.738 trillion 2016.

“However, total disbursements increased in Q4 by 8.8% from N1.233 trillion in 2015 to N1.343 trillion in 2016.”

The report revealed that “the federal government received a total of N2.08 trillion from the federation account in 2016, which represents a drop of 19.9% of the total N2.6 trillion received in 2015.”

The 2016 budget was for N6.06 trillion, implying that at N2.08 trillion, total FAAC disbursements were only 34.3 percent of the budget.

“Thus, the federal government would have to resort to even higher debts to fund the budget. The implication of this is that debt service payments, which accounted for 24.3% of the 2016 budget, would increase.”

 

Source: The Cable

Knowing the real owners of companies is critical to checking corruption – NEITI boss

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Waziri Adio, executive secretary of the Nigeria Extractive Industries Transparency Initiative (NEITI), says knowing the real owners of companies is critical to checking corruption.

He identified Nigeria’s membership of Open Government Partnership as a timely platform to push for disclosure of beneficial owners of companies in the oil, gas and mining industries in the country.

According to a statement issued by Orji Ogbonnaya, the agency’s spokesman, Adio said this while addressing a consultative forum on open government partnership (OGP) in Abuja.

“Knowing how much companies paid in the form of taxes, royalty, rents, etc. and how much government received is important, but not enough,” he said.

“Knowing those who are the real owners of the companies is critical to checking corruption, money laundering, drug and terrorism financing, tax avoidance and evasion.”

He called on the federal government to enact a special legislation that would compel companies in the extractive sector to make public the names and identities of their real owners.

Adio also called on the president to issue an executive order on compulsory beneficial ownership disclosure by extractive industries companies in Nigeria.

He explained that such legislation could be embedded or be part of the Petroleum Industry and Governance Bill (PIGB) and should also constitute amendments to the Companies and Allied Matters Act (CAMA).

Adio announced that nine countries, including Nigeria, have published EITI reports that disclosed the beneficial owners of one or more companies.

He also told participants that forty – three EITI implementing countries have published roadmaps on beneficial ownership out of which twenty, including Nigeria, plan to establish public registers of beneficial owners by 2020.

The executive secretary said NEITI has published a road map on beneficial ownership disclosure which provided clear definition of who beneficial owners are, the level of details to be disclosed and institutional framework that are required for effective implementation of beneficial ownership disclosure.

The document also defined politically exposed persons (PEPs) and their reporting obligations, challenges around data collection, reliability, accessibility, timeliness and provided clear guides on them.

Adio identified the absence of specific legal framework that imposes mandatory beneficial ownership disclosure as a major challenge to the implementation of ownership transparency in Nigeria.

While acknowledging the existence of laws like the Companies and Allied Matters Act, Freedom of Information Act, Code of Conduct and Tribunal Act and Public Complaints Commission Act as relevant legislations for beneficial ownership, he noted that there are other policies of the Nigerian government that support efforts at ownership disclosures.

N1.1trillion Tax Waivers To Oil Firms A Loss To The Nation – NEITI

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By granting Pioneer Status, the Federal Government has waived $2.1 billion (N1.1 trillion) to 22 oil companies through tax holiday as at 2014.

These companies are operators in the marginal field segment of the Nigerian oil and gas industry, according to the latest report from the Nigerian Extractive Industries Transparency Initiative (NEITI).

Pioneer Status is a tax holiday incentive, designed by the Federal Government and backed by the law granted to targeted industries, products and services, designated as priority areas and growth drivers of the economy.

Some have argued that these are monies lost to government and to Nigerians in general, as these could have been ploughed back into the petroleum sector, particular the downstream infrastructure including refineries, depots, jetties, pipelines network and a host of others to improve products distribution in the country.

NEITI, the revenue watchdog, also shares this view in its 2014 Oil and Gas report, which regarded the tax waivers, as a loss of revenue to the federation, which it noted, would hamper development projects in the economy.

A copy of the report obtained by The Guardian stated that granting pioneer status to oil and gas companies has greatly undermined the optimal collection of revenue due from Petroleum Profit Tax (PPT).

The agency therefore, said that pioneer status should not be granted to any company in the oil and gas sector, unless it is evidently clear that the company is actually pioneering an aspect of the industry in the country.

It therefore, called for a “Regular review of the pioneer status to discover some of the companies granted tax waivers that had outgrown pioneer status.

“A coordinating desk should be established in the Ministry of Finance for all the agencies that process tax incentives while the final approval for tax waivers should be issued by the Minister of Finance,” it stated.

Speaking recently on the benefits of pioneer status, Seplat Petroleum Development Company Plc’s Chief Executive, Austin Avuru, noted that the grant of pioneer status made it possible for the company to boost oil and gas production, provide employment opportunities, impact on their communities and help grow the Nigerian economy.

At the presentation of report by the Tax Justice and Governance Platform, tagged: “Pioneer Status in Oil and Gas Industry; Is It Worth It?,” discussants argued that the pioneer status given to oil and gas companies was not worth it, noting that as long as these companies are making profit, they will be adding little or nothing to the development of the nation.

The group urged the National Assembly to monitor the action of government agencies in granting tax incentive. “The FIRS should ensure that PS beneficiaries file tax returns annually with sanction imposed on defaulters. NIPC capacity in monitoring pioneer companies should be strengthened, while removing matured companies from the pioneer status list. Government should sign a Memorandum of Understanding (MOU) with marginal field operators on the establishment of guaranteed margins for the companies.”

Explaining the benefits of pioneer status to companies, the Nigerian Investment Promotion Council (NIPC) said in a document on “Investing in Nigeria,” that the grant of Pioneer Status to an industry is aimed at enabling the industry concerned to make a reasonable level of profit within its formative years.

It noted that the profit so made is expected to be ploughed back into the business.

The Agency stated: “Pioneer status is a tax holiday granted to qualified or (eligible) industries anywhere in the Federation and five-year tax holiday in respect of industries located in economically disadvantaged local government area of the Federation. At the moment, there is a list of 71 approved industries declared pioneer industries, which can benefit from tax holiday.

“To qualify, a joint venture company or a wholly foreign-owned company must have a minimum share capital of N10 million and incurred a capital expenditure of not less than N5million, whilst that of qualified indigenous company should not be less than N150,000.00. In addition, an application in respect of Pioneer Status must be submitted within one year the applicant’s company starts commercial production otherwise the application will be time-barred.”

Only three states can fund their budgets – NEITI

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With the exception of three states – Lagos, Delta and Rivers – the remaining 33 states and the Federal Capital Territory (FCT) may not be able to fund their annual budgets, the latest quarterly review on national revenue disbursements to the federal, states and local governments prepared by the Nigeria Extractive Industries Transparency Initiative (NEITI) has disclosed.

This is because of the prolonged drop in revenue accruing to the federation mainly from the oil and gas sector.

Released yesterday in Abuja, the document explained that while revenue from the country’s national earnings had dropped, and states expected to augment their shares with internally generated revenues (IGR), only Rivers, Lagos and Delta States can boast of their clear abilities to earn enough IGRs to close the expected revenue gaps and fund their budgets.

It said the federal government, states and local government areas got a total of N1.534 trillion as allocations from the Federation Account Allocation Committee (FAAC) for the months of July, August and September 2016.

According to it, a breakdown of the allocations for the third quarter of 2016 showed that the federal government received N697.9 billion, the states got N512.66 billion, while the local government areas collected N324.31 billion.

It, however, said there was a major revenue spike in July when the three tiers of government shared N546.62 billion as against the N304.91 billion they shared in June, an increase of 79 per cent.

Considering that most states depend on FAAC to fund their annual budgets, the NEITI document observed that lower monthly disbursements would likely impact the budget implementation of most states of the federation in very negative ways.

It said: “Although the states also have revenue inflows from IGR, the report contends that, it is highly unlikely that IGR would be sufficient to offset the huge gap between expenditure and revenue in many states, with perhaps only the exception of three states – Lagos, Rivers, and Delta.

“The dwindling revenue from the petroleum sector, which has led to substantially lower disbursements from FAAC, will limit the ability of states to effectively execute their budgets,” the NEITI report explained.

NEITI, BudgITng releases report on NNPC’s monthly financial and operational reports

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As part of efforts to present its independent Audit reports in a simple, concise and correct format, NEITI has elicited the support of BudgIT a Non- Governmental Organization known for expertise in open data analysis and communication.

 

The partnership and cooperation follows series of meetings between the Executive Secretary, Waziri Adio and the organization.

 

As the wind of openness and transparency continues to blow through the extractive industry, the walls of secrecy are tumbling. NEITI in conjunction with BudgIT has release its report on NNPC’s monthly financial and operational reports.

 

Click here to VIEW the Report.

NEITI: We made N70tr from oil in 15 years. How did we end in recession?

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Waziri Adio, executive secretary of the Nigeria Extractive Industries Transparency Initiative (NEITI), says the country had no business going into recession with the huge revenue from oil from 1999 to 2014.

 

He said while the three tiers of government earned and shared N70 trillion oil and gas revenue during the period, there was no provision for savings.

 

He was speaking on Monday when he played host to members of the senate committee on federal character and inter-governmental affairs who were on an oversight visit to his office in Abuja.

 

Adio said it would be necessary for Nigeria to develop prudent spending to avoid lapsing into recession again.

 

Year Oil Revenue
1999 N724.42 billion
2000 1,591.68 trillion
2001 N1,707.56 trillion
2002 N1,230.85 trillion
2003 N2,074.28 trillion
2004 N3,354.80 trillion
2005 N4,762.40 trillion
2006 N5,287.57 trillion
2007 N4,462.91 trillion
2008 N6,530.60 trillion
2009 N3,191.94 trillion
2010 N5,396.09 trillion
2011 N8,878.97 trillion
2012 N8,025.97 trillion
2013 N6,809.23 trillion
2014 N6,793.72 trillion

 

Adio said: “Let me inform the committee that we discovered that between 1999 and 2014, the country spent over N70 trillion it received from oil and gas alone. That is a whole lot of money. What is sad is that it was spent without the country being able to show anything for it. I think it is quite unfortunate.

 

“For the sake of emphasis, however, I think if previous administrations had developed a culture for prudent management of resources, Nigeria ought to have over $100 billion saved in the excess crude account. So, going forward, it is necessary for government to think about saving a lot more, and do all it can as well to cut down on wasteful spending if the nation must make progress.”

We Can’t Identify True Owners Of Oil Blocs, Assets — NEITI

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he Nigerian Extractive Industries Transparency Initiative, NEITI, yesterday, lamented that the true owners of some oil blocs and other oil and gas assets in Nigeria cannot be identified from the records of the Corporate Affairs Commission, CAC. It also accused owners of some of the assets of suppressing certain information and manipulating their records in the CAC, making it impossible to link them with the assets.

Acting Executive Secretary of NEITI, Mr. Ogbonnaya Orji, disclosed this in Abuja during a meeting with delegates from the global Extractive Industries Transparency Initiative, EITI, led by the incoming chair, Mr. Fredrik Reinfeldt, and civil society organizations. According to Orji, the issue of beneficial ownership as contained in EITI’s standards, requires the identity of the true owners of oil blocs, adding that records of the companies in the CAC are shrouded in secrecy and do not provide correct information about the true owners. He stated that this had been a challenge in implementing this specific requirement of EITI, while he appealed to EITI to understand the peculiarities in the Nigerian environment.

He said: “Beneficial ownership requires us to explain or provide information on the owners of certain oil blocs. But Nigeria is one kind of country; that is why I say nobody is going to suspend us; when you think we are going down, we tend to rise up and surpass expectations. “One challenge is that we try to reflect this issue of beneficial ownership in our report, but the CAC is where you register legitimate companies doing business in Nigeria.

If you go to CAC, the information that you find have no relationship with what you know. That is, those you know are the owners of this oil blocs.  Reinfeldt lauds NEITI In his remark, Reinfeldt, the incoming chair of EITI commended NEITI for its efforts at entrenching transparency in the extractive industry, adding that with some of its policy recommendations to the Federal Government, NEITI had been able to go further in its activities. Speaking in the same vein, Deputy Head and Regional Director for Africa and Middle East of EITI, Mr. Eddie Rich, stated that the global body understood the challenges confronting NEITI, with regards to the reports.

Source – www.vanguardngr.com

Ministerial Appointee, Zainab Ahmed, Hands Over At NEITI Ahead Of Inauguration

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The outgoing Executive Secretary of the Nigeria Extractive Industries Transparency Initiative (NEITI), Zainab Ahmed, on Tuesday handed over the management of the agency to the Director of Communications of the agency, Ogbannaya Orji.

Mrs. Ahmed is one of President Muhammadu Buhari’s ministerial nominees confirmed last week by the Senate.

In her valedictory speech Tuesday, Mrs. Ahmed described her appointment as not a personal recognition, but an acknowledgement of the importance of NEITI’s role in the country.

“The appointment is therefore a key achievement for all of us. It is one of the major impacts of EITI in Nigeria and a positive acknowledgement of the work we have all collectively done in the last five years,” Mrs. Ahmed noted

Credit: PremiumTimes

Recover N4trn From Oil Firms, NEITI Tells Buhari

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Nigeria Extractive Industries Transparency Initiative (NEITI), yesterday, indicted oil and gas companies operating in Nigeria of defrauding the country to the tune of $19.1 billion, about N3.82 trillion, over the last couple of months, calling on President Muhammadu Buhari to ensure the recovery of the money from the companies.

NEITI, in a statement in Abuja, disclosed that the amount represents clear cases of underpayments, under-assessments of taxes, royalties, rents, among others, revealed in its several independent audit reports which have not been adequately addressed in the past.

Read More: vanguardngr