A Fiscal Allocation and Statutory Disbursement (FASD) report published by the Nigeria Extractive Industries Transparency Initiative (NEITI), covering 2017-2019 has revealed that four Federal Government agencies generated N28.02trillion within the period under review.
From the figure, minerals revenue contributed N12.84trillion (56.61percent) while non-minerals revenue contributed N6.57trillion (28.97percent).
Value-added tax (VAT) accounted for N3.27trillion (14.42percent), while ¦ 19.01trillion mineral revenue was disbursed to the tiers of government.
The report also highlighted that states’ over-dependent on Federation Account has peaked, as it currently accounts for 71percent of their earnings.
The report also noted that 81percent of states allocations is spent on recurrent expenditure.
The N28.02trillion was generated by the Nigerian National Petroleum Corporation (NNPC); Federal Inland Revenue Services (FIRS); Department of Petroleum Resources (DPR) now Nigeria Upstream Petroleum Regulatory Commission (NUPRC) and the Ministry of Mines and Steel Development (MMSD).
Out of the amount, N22.68trillion was remitted to the Federation Account.
The cost of collection and Joint-venture cash calls deductions by revenue generating agencies accounted for the differences between revenue generated and remittance.
The NEITI’s FASD audit examined total extractive industry revenue remitted into the Federation Account, tracked allocation and disbursement from the account to statutory recipients as well as utilization and application of the funds by the beneficiaries between the years 2017-2019.
It also covered nine selected states: Akwa-Ibom; Bayelsa; Delta; Gombe; Imo; Kano; Nasarawa; Ondo and Rivers states.
On the nine selected states covered by the exercise, the report revealed that their combined revenues inflows within the three years period were N5.104trillion.
Breakdown showed that statutory allocation accounted for N3.55trillion, while internally generated revenue (IGR) and loans accounted for N1.33trillion and N227billion, respectively.
Further breakdown shows that Delta State recorded the highest revenue of N1.083trillion while Nasarawa State recorded the lowest revenue of N214billion.
The beneficiary agencies include: Niger Delta Development Commission (NDDC); Tertiary Education Trust Fund (TETFund); Petroleum Trust Development Fund (PTDF); Petroleum Equalization Funds (PEF); Ecological Fund (EF) and Stabilization Fund (SFs).
Others are: Nigerian Sovereign Investment Authority (NSIA); Development of Natural Resources Fund (DNRF); Excess Crude Account (ECA); Nigeria Content Development and Monitoring Board (NCDMB) and Petroleum Products Pricing Regulatory Agency (PPPRA).
The NEITI FASD report revealed that FIRS generated ¦ 13.48trillion within the period under review with Petroleum Profit Tax (PPT) accounting for N5.80trillion (43.09percent), while Value-Added Tax (VAT) and other taxes accounted for 32percent and 24percent, respectively. The service recorded highest revenue collection of N5.02trillion in 2018.
The report disclosed that a total sum of ¦ 8.82trillion was generated by NNPC within the period. Breakdown shows that ¦ 4.55trillion came from domestic crude sales, while export receipts accounted for ¦ 4.27trillion.
It further disclosed that ¦ 5.33trillion was deducted at source for JV cash call and others, leaving the net amount of N3.49trillion as transferred to Federation Account.
“During the period under consideration, a total of ¦ 8.82trillion was generated. However, only ¦ 3.49trillion (39.5percent) was remitted to the Federation Account due to deductions at source by NNPC for JV cash calls. The Deductions at source by NNPC negate the principle of Federation Account”, NEITI’s report stated.
From the report, DPR (now NUPRC) generated ¦ 3.53trillion for the three years under review, with royalty payments accounting for N3.40trillion (96.41percent).
The agency, however, transferred ¦ 3.53trillion to the Federation Account.
The audit established that the surplus of ¦ 6.72billion was as a result of unremitted receipts from prior year.
Ministry of Mines and Steel Development (MMSD) generated ¦ 12.498billion within the three years period.
Breakdown show that Mining Inspectorate Department (MID) contributed N6.43billion while Mining Cadastral Office (MCO) accounted for N6.06billion.
From the total revenue generated by the Ministry, a sum of ¦ 7.56billion was shared to the three tiers of government in 2019.
On the NDDC, NEITI report revealed that ¦ 755.96billion was generated by the commission within the period under consideration.
Breakdown shows that N551.08billion (73percent) was contributed by oil and gas companies, while the balance of ¦ 203.90billion (27percent) was the Federal Government’s contribution to the commission.
The report further revealed that the total expenditure by the commission during the period under review was N882.3billion.
Analysis of the expenditure shows that N778.29billion (88.20percent) was expended on development projects, while operational cost accounted for N104.07billion (11.80percent) of the total.
Analysis of project execution in member states ranks Delta State highest in terms of development projects undertaken by the commission to member states with total expenditure of ¦ 40.46billion (26percent) of the actual expenditure within the period, while Edo received the lowest development projects of about 5percent.
NEITI audit established that there was a gap between actual development projects expenditure as per audited financial statements and project monitoring list provided by the commission in the sum of ¦ 522.60billion.
“While N679billion was reported in NDDC’s financial statement, the project monitoring list reported expenditure of N157billion on physical projects among the nine member states”, NEITI audit report revealed.
The report, however, disclosed that 40 oil and gas companies defaulted in their payment obligation to the commission.
It also disclosed that the commission did not receive any monies from the Ecological Fund as stipulated by the law throughout the three years under review, this obviously negatively affected revenue inflow into the commission within the period.
On the Tertiary Education Trust Fund (TETFund), NEITI reported that the fund realised N644.19billion within the three years under review.
The NEITI report established that the actual funds available for disbursement by TETFund in the three years period was ¦ 624.32billion.
The report also disclosed that the sum of ¦ 102.14billion (46.55percent) was disbursed to the universities, while ¦ 46.12billion (21.35percent), ¦ 49.97billion (21.97percent) and ¦ 27.09billion (10.12percent) were disbursed to Polytechnics, Colleges of Education and other tertiary institutions programmes, respectively.
NEITI noted that the process of accessing the fund is cumbersome, and called on TETFund to simplify the process to enable more universities access the funds.
Petroleum Technology Development Fund (PTDF) revenue for the period under review was put at ¦ 155.34billion and 95percent came from signature bonus paid by oil and gas companies which is the main revenue source to the agency.
NEITI report reveals that out of ¦ 86.34billion utilised by the agency within the period under review, ¦ 59.84billion was spent on core operating expenses while ¦ 26.35billion and ¦ 143million was for personnel/administrative expenses and capital, respectively.
The report noted that the PTDF extended funding to 125 approved institutions, 43 locals and 82 foreign institutions.
According to the NEITI report there was low expenditure compared with the revenue released during the years under review as only 56percent of revenue was utilised.
The NEITI report put total receipts by Nigeria Content Development and Monitoring Board (NCDMB) for the three years under review at ¦ 126.73billion.
It noted that one percent Nigerian Content Development (NCD) payment accounted for N116.95billion (92percent) of the revenue.
The Federal Government stopped funding the agency from its budget in 2017.
According to the report, 48.07percent of the revenue was used for operating expenses while 51percent was used for capital expenditure.
The Nigerian Sovereign Investment Authority (NSIA), NEITI report disclosed that the total financial flows for the three year period were ¦ 1.33trillion.
Breakdown shows that the sum of ¦ 76.28billion was contributed by the government to the funds in 2017, while the sum of $250million was approved by National Economic Council (NEC) in 2019 but the money was remitted to the authority in August, 2020.
The report also revealed that NSIA’s investment fund witnessed phenomenal increase of 71percent within the three years under review to the sum of ¦ 946.36billion and noted that the return on capital employed for the Stabilization Fund (SF), Future Generations Fund (FGF) and Nigeria Infrastructural Fund (NIF) were 8.68percent, 7.21percent and 5.40percent, respectively.
NEITI report disclosed that Petroleum Product Pricing Regulatory Authority (PPPRA) received a total of N27.68billion as Federal Government subvention for the three years period.
It noted that the regime of subsidy payment on petroleum product was discontinued within the period under review.
The Ecological Fund (EF) recorded a total sum of ¦ 170.15billion during the period under review with statutory allocation accounting for the 93.43percent of the total revenues.
NEITI report reveals that North-Central received the highest projects in the sum of ¦ 36.08billion, while South-South received the lowest projects delivered amounting to N10.93billion.
The report also revealed that National Emergency Management Agency (NEMA) received ¦ 34.04billion from the fund.
From the report, total receipts accrued to the Stabilization Fund (SF) during the period under review were ¦ 85.10billion.
Breakdown shows that Statutory Allocation contributed 93.44percent, while other receipts accounted for 6.56percent.
NEITI reports disclosed that significant proportion of the fund during the period under review went into budget augmentation which was mainly disbursed to the states, noting that the 25percent transfers to NSIA fulfil the Fund’s statutory requirement to be set aside for investment purpose.
The report further noted that N17.4billion was transferred from the Fund in 2019 to African Union (AU) as Nigeria’s share of contribution to the body.
This transfer accounted for 19.74percent of the total disbursement from thefFund during the period under review.
The report also noted that expenses related to Federation Account Allocation Committee (FAAC) meetings and professional fees accounted for 8percent of the total fund outflows.
On Development of Natural Resources Fund (DNRF), the report revealed that the fund’s total receipts within the period under review were N284.92billion.
It noted 93.77percent of it came from statutory allocation.
The total disbursement from the fund was N312.01billion.
Disbursements to Federal Ministry of Water Resources and capital projects accounted for 44percent and 16percent, respectively.
Furthermore, the sum of N34.08billion was transferred to NEMA in 2019 which represented 11percent of total disbursement of the fund.
NEITI report revealed that not all receipts to the fund were utilised for the purpose for which the fund was established.