Nigeria has to raise taxes to exit recession – PwC CEO

The Country Senior Partner, PricewaterhouseCoopers Nigeria, Uyi Akpata, discusses the performance of the economy and government policies with IFE OGUNFUWA

What is your assessment of the Nigerian economy and the policies that have been introduced to keep it afloat?

I remain very optimistic because we can see that the government and the private sector appear to align in terms of where we think the real change needs to come from. It was very obvious from the beginning that we needed to stimulate the economy.

So discussions about loans are timely and if you look at that against the backdrop of a government that is preaching transparency, if we match those two together and we get those funds into real development, then we are on the path to economic recovery.

It is going to be challenging, as I tell my people internally, and we need to redouble our efforts to come out of recession.

What policies should be introduced to come out of recession?

I think the policies have been fairly consistent though the economy is telling us a different thing. From a very clear point of view, we are still quite dependent on foreign currency. Ultimately, if we reduce our dependence on that and drive economic development, things will turn around. We need to plough those funds into the real sector. One area I will like to see quick change is in encouraging the private sector.

All the loans that are coming in will help but it is going to be on the long term. The government should just target the policies around the ease of doing business. The foreign funds coming into Nigeria will be very significant. People will want to bring in such funds when they know they can get proper returns from them under a more stable environment.

What type of taxes should be reviewed?

It is like a catch-22 situation in which you say companies or businesses are doing badly and you are thinking of increasing taxes. The truth is that when we think about the ratio of taxes to Gross Domestic Product, Nigeria is one of the lowest. It means that there is a huge gap for us to explore. So, if there is anyone interested in real development in Nigeria, then we have to recognise that we have to raise the basis for taxes. That is one of the income and revenue streams that will see us out of these economic doldrums.

Is increased government spending capable of reducing the high inflation rate, which is currently at 18.48 per cent?

That will be in the short term. But if the government provides such funds and real development takes place, there is going to be a plateau at some time and obviously, we will be better for it. There are still challenging times ahead but I believe we have seen the worst of it, at least from the feelers around us. But we still have people who are just like ‘let’s just get round this curve.’

Everyone is anxious to see things happening. When we are dealing with the government from different areas, people are excited and saying they want to invest in entertainment, tourism, capital projects and infrastructure. Lagos State Government, for instance, is one of the clients we interact with.

People want to do business here because they see the potential. The opportunity in Europe is very limited. Africa still remains the destination but we just need to send the clear-cut signals that we are ready to support such investments.

How do you reconcile Nigeria’s continued dependence on crude oil with the measure to diversify the economy?

We survived on $30 oil price for a long time and $50 is an exciting price. I am happy with what people are saying about the issue of security because if we ramp up production to about 2.5 million barrels a day, the price will not be a factor provided we deal with issues related to OPEC membership.

A price of $50 with a production range of 2.5 million barrels a day is enough for us to stimulate the economy. At least, let’s learn our lessons from the past. Alternative sources will be a key way to go. Mining and, to a limited extent, cash crop agriculture may be medium to long term. But we cannot get rid of oil as it were because we need oil for us to expand and create other alternative sources of revenue.

It is just about reducing our foreign exchange exposure and looking at other sectors. They are many, like tourism. Some colleagues came from South Africa and decided to spend the weekend here for the first time. They said that the potential we have in terms of natural resources available for tourism was far superior to what they have in Cape Town. And when we look at it, maybe four million people visit Cape Town and here we have less than half a million coming into the country. There are different areas cutting across the country. It is just for us to improve security, infrastructure and power, then leave the rest and we will thrive.

What is your view on the nation’s growing foreign debt?

When you look at our population and the ratio in terms of our ability to repay these funds, we still have strong capacity to borrow. The most important thing with borrowing is that we should utilise it for value-added projects and infrastructure. And if you are doing it on the platform of a government that is seen to be more transparent, then our chances of leveraging those investments or getting absolute returns over a long period will be more possible.

Nigeria is an ongoing concern. You don’t look at Nigeria and say we need this in the next three to four years. We will be here in a hundred years; so we need those investments that are sustainable so that when people look at the country in 50-year time, they will see the giant strides because we made an investment of N30bn today. If you sit back and say we won’t invest in the real sector, that the money we put there will be detrimental to the people, then we are not building a sustainable economy.

How significant is the PwC alumni dinner?

This year is particularly symbolic because we just moved to a new office and it is an opportunity to tell our alumni family that we will continue to do those investments to sustain the PwC name itself as it relates to the quality of services and ethics in business conduct that we are noted for.


Source: PUNCH

Ex-minister Adoke, PwC Indicted In Shady Ajaokuta Steel Company Deal.

Pricewaterhouse Coopers, PwC Nigeria and former Attorney General of the Federation, AGF, Mohammed Bello Adoke have allegedly been fingered in a shady deal associated with the August 1, 2016 modified reconcession agreement of Ajaokuta Steel Company of Nigeria, ASCN.

On August 1, 2016, the Federal Government signed a modify reconcession agreement with an Indian firm, Global Infrastructure Nigeria Limited, GINL which led to Nigeria reclaiming the ASCN and the National Iron Ore Mining Company, NIOMCO, Itakpe which had earlier been concessioned to GINL.

However, the August 1, signing ceremony appeared to be a flash in the pan as Nigerians were made to believe what happened then was nothing but the truth.

Barrister Natasha Hadiza Akpoti alleged in an open letter to Nigerians dated 31 December 2016, and titled “Corrupt Practices Surrounding Ajaokuta and Itakpe” disclosed that the country had a good chance to reclaim both ASCN and NIOMCO, Itakpe base on unequivocal evidence but that the activities of one ‘Alhaji’, PwC and Adoke has made it impossible.

She explained the Minister of Steel and Solid Mineral, Dr. Kayode Fayemi lied to President Buhari and Nigerians that the country had no evidence against GINL in the London Court of Arbitration.

She stated that Fayemi told Nigerians that “Nigeria already agreed that we were liable to pay somewhere in the region of $500 to $700m to GINL as estimated by BPE etc…”, and since Nigeria couldn’t afford that, it was agreed to give Itakpe back to the GINL in compensation for 7 years.

In her words: “Like Halliburton and Malabu oil scandals, Ajaokuta and Itakpe suffered greatly in the hands of Adoke who happens to be a son of Itakpe.

“One would have expected utmost care in executing his duties as the then Attorney General of Nigeria and lead representative of Nigeria at the Arbitration proceedings instituted in the London Court of International Arbitration by the GINL against Nigeria on the termination of Ajaokuta and Itakpe concessions by the late President Yar’Adua administration. But, he betrayed Nigeria. How?

“Nigeria had a very good chance of winning the arbitration case against the Indians as there were tons of evidence mainly from Inuwa Magaji’s report amongst others.

“GINL feared the anticipated lose and engaged Price Waterhouse Coopers (PWC) to help them “work” victory out through Nigeria’s corridors of power. PWC approached ‘Alhaji’ who was a close ally to Vice President Namadi Sambo. ‘Alhaji’ “discussed” with Adoke, spent a lot of money and a deal was struck.

“Adoke sought an approval from President Jonathan for an out of court settlement. This ended the arbitration in London court and started the mediation process supervised by Mr. Philip Howell Richardson. The first mediation meeting was in London on the 15th February 2013.

“A presidential committee was set up comprising of the V.P’s office, BPE, AGF, amongst others headed by the then Permanent Secretary Min. of Mines and Steel, Mrs. E.B.P. Emurem.”

She explained that the presidential ‘Kangaroo’ committee indicted Late President Yar’Adua of terminating the Ajaokuta and Itakpe concessions with GINL and estimated damages totally $525 million payable to GINL

She added that the committee then arrived at a decision to compensate GINL with 7 years of Itakpe Iron Ore since Nigeria had no such money to pay, noting that Adoke got a presidential approval to execute this “modified fraudulent re-concession agreement” on the 7th of January 2015 but failed in executing it because the then Minister of Mines and Steel Arch. Sada refused to be a part of the fraud.

Unfortunately, Fayemi executed the same contract Adoke drafted even replicated the exact same grammatical errors contained in the Adoke’s contract.

“At the August 1st signing ceremony, Fayemi said there would be a joint forensic audit of the concessions and this is to be supervised by one of the top global four consultants which was PwC.

“Yes. Fayemi engaged PwC to supervise GINL’s concession, the same consultants that GINL engaged in 2012 to help pull strong strings to save GINL from losing totally.

GINL Belongs to ‘Alhaji’

Meanwhile, Natasha claims that the owner of GINL, not the famous Pramod Mittal but one ‘Alhaji’ who contacted her for a peace talk.

“He is an ‘Alhaji’ quite prominent in the circles of power especially during the  Jonathan’s administration. This wasn’t his first time contacting me. He first called me up on the 12th of August after my Channel’s interview, then on 16th and 18th August 2016. I met with him on these 3 August dates but didn’t oblige his 26th December’s call. From my interactions with him I deduced the following facts:

“The pseudo partnerships of GINL- – GINL is no longer owned by Pramod Mittal. Pramod Mittal’s presence at the 1st August 2016 NIOMCO Itakpe’s re-concession was just part of the keeping – up – appearances-to –deceive Nigerians agreement between Pramod and ‘Alhaji’ who is the present owner of GINL. This ‘Alhaji’ has no expertise in operating mines. He is also not evidentially linked to GINL as most documents still bear Pramod Mittal to deceive Nigerians.

“Now that GINL has gotten NIOMCO, Itakpe back, they want to acquire Ajaokuta Steel complex too. ‘Alhaji’ asked that I connect them with TyazhPromExport (TPE for short, the original builders of the plant from Soviet Russia) as technical partners to facilitate their acquisition of Ajaokuta under a NEW NAME that would not connect the Nigerian public to GINL.

“Alhaji said he opted for Russia despite him being extremely connected to China (he is the chair of China’s largest construction firm in Nigeria) because he believe only the original builders will do sincere justice to Ajaokuta Steel mill but if I refused to bring them on board, he would go ahead to acquire Ajaokuta using his Chinese partners. I turned that down because I didn’t want to be a party to any deceptive “underground” arrangements and manipulations,” she claims.

Buhari appoints PwC, KPMG to audit NNPC, CBN, FIRS, others

The Federal Government has appointed renowned accounting and auditing firms, PricewaterhouseCoopers (PwC) and Klynveld Peat Marwick Goerdeler (KPMG) to audit Nigerian National Petroleum Corporation (NNPC) and other agencies.


This came after the National Economic Council’s ad-hoc committee on the management of the Excess Crude Account proceeds and accruals into the Federation Account on Thursday said it had hired two firms, the KPMG and the PriceWaterHouseCooper, to audit the accounts of all Federal Government’s revenue-earning agencies.


Also to be audited are Central Bank of Nigeria (CBN), Federal Inland Revenue Service (FIRS), Nigeria Customs Service (NCS), Department of Petroleum Resources (DPR) and Nigerian Maritime Administration and Safety Agency (NIMASA).




Others are Securities and Exchange Commission (SEC), Revenue and Mobilisation Allocation Federation Commission (RMAFC) Federal Ministry of Finance, Nigerian Ports Authority (NPA), Office of the Accountant General of the Federation, Nigerian Extractive Industry Transparency Initiative (NEITI) among others.






Buhari and his party, the All Progressives Congress (APC) had accused the Goodluck Jonathan led-administration of undermining previous audit of the agencies.




Hence, there has been tension in many of the agencies marked for investigation of corrupt practices.




Those still in office as well as former staff, including retired or sacked workers, are monitoring developments and anxious of contents of the audit report, it was leant.




Edo State Governor, the chairman of the National Executive Council-backed committee set up to investigate NNPC financial accounts had disclosed that the audit of affected agencies would cover the period between January 1, 2010 and June 30, 2015.


Probe & Sanction PwC Over “Unprofessional Auditing”, Reps To Buhari

House of Representatives Committee on Public Accounts has urged the incoming government of President-elect Muhammadu Buhari and regulators of the accounting profession to probe and sanction PricewaterhouseCoopers (PwC) over “unprofessional auditing” of the alleged missing $20 billion oil funds.

Its chairman, Solomon Adeola, added that any amount paid to the company for the audit of the accounts of the Nigeria National Petroleum Corporation (NNPC) should be recovered by the Federal Government “because no auditing was done”.

Adeola, who spoke in Abuja with reporters on the purported release of the forensic audit report by the firm, said it was meant to mislead, deceive and to send wrong signal to the citizens.

He hailed Gen. Buhari for signaling his resolve to probe the alleged missing oil money after taking over from President Goodluck Jonathan’s government at the end of the month.

He said: “There is need for us to revisit and know the truth behind this particular issue. Where is this $20 billion? Is it really missing? This is not N20 billion; it is billions of dollars, which represent more than two years’ budget of this country in terms of funding.

“If you could remember, there was a press statement by this committee, where we requested that this all important forensic report be laid before the National Assembly, and a copy sent to this committee within a specified period of time.

“This was because we noticed there was some foul-play in that particular report as submitted by this reputable firm, the PricewaterhouseCoopers, where in that report it was adjudged that the amount of money that the NNPC ought or need to pay back was just $1.485 billion.

“Now, the PwC has said there was no report and that what they did was not a forensic audit, but just gathering of information; that a lot of documents were not released to them to carry out this exercise.

“But prior to now, all these were not brought to the notice of this country and the country has been deceived all along.

“And if a reputable firm like PricewaterhouseCoopers can go to that level, I think it’s only fair and proper for such body to be reported to the International Federation of Accounting, Association of Conference, and also to the Institute of Chartered Accountants of Nigeria; and to face disciplinary action of all these bodies by explaining their role in this $20 billion saga.”

He called on the incoming government “to henceforth suspend PricewaterhouseCoopers from carrying out any financial audit or investigation on behalf of the Federal Government or into any of its agencies with immediate effect.

“And not only that, it has collected audit fees from the Federal Government. If there was no audit carried out and if there was no report submitted, I think they should go ahead and refund back into the Federal Government coffers the amount collected in carrying out this exercise; failure which should be met with very stiff disciplinary action from the Federal Government and relevant professional bodies.”

He said for a highly rated firm like PwC to be allegedly involved in such financial saga showed that “there is more to it”.

Adeola said all audit exercises and investigations that have been carried out by PwC in the past few years should be revisited by the incoming government.

According to him, this should include the oil subsidy report tendered by PwC.

“Don’t forget during the oil subsidy issue, PricewaterhouseCoopers was engaged to carry out audit exercise. I also implore the incoming administration to carry out verification of the report submitted on the issue of the oil subsidy,” he said.

The lawmaker said his committee and the National Assembly have been vindicated in their insistence that the report was fraudulent.

“We must get to the root of this matter, and we must address this issue once and for all,” he said.


Our Report Is A Review, Not A Forensic Audit- PWC

The forensic audit conducted by Price WaterhouseCoopers, PWC, on NNPC to ascertain the veracity of the alleged missing $20 billion from the Federation account is generating furore and counter claims among stakeholders. PWC had qualified the audit saying it did not obtain needed information from NPDC a subsidiary of NNPC.

The qualification of the audit report has cast doubt on the reliability of the report. A source who has a working knowledge of the audit report at PriceWaterhouse told Vanguard that what the auditors did was a review and not a forensic audit. He said “It is not an auditing job.

It is a review of what has happened and you are expected to present a report. The qualification in the audit report is a normal qualification. When you are given a job there are procedures for doing the job based on agreement with the client.

So you want to put a caveat so that others would not use  it or rely on it for decision making. It is also to protect the company from any legal  action that may arise from the job.”

President Institute of Chartered Accountants of Nigeria, ICAN, Mr. Chidi Onyeukwu Ajaegbu (FCA) told Vanguard that an account is qualified when the auditors do not agree with the auditee on some issues. He said there are two levels of qualifying an account: modification and actual qualification.

He said the qualification could be expressed on strong terms or mild terms, adding that a qualified account calls for further instigation. Ajaegbu said the NNPC case is that of material qualification where a unit being audited did not provide the needed material substance.

He said the reason given by PWC was enough to qualify the account, adding that auditors qualify accounts to shield themselves from blame by potential users of the account when they discovered some misstatement or representation in the account.

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