“Nigeria losing $30bn annually from revenue leakages –REPS.”
News Report, June 29, 2021.
Golda Meir, 1898-1978, First Female Prime Minister of Israel, born in Kyiv, Russia, used to tell one story about a man in Odessa who always knew when the sheep will be stolen – until it was discovered he was the thief. Each time top public officials announce exactly how much is being stolen in Nigeria, my mind tells me two things. One, they know who is stealing and are reluctant to say. Two, they are reluctant to say because they probably have been compromised themselves.
“Insanity is doing the same thing over again and expecting a different result.”
If that Asian observation is correct, then Nigeria must be one huge mental house. We repeat the same atrocities, which set us back, and expect a different result. The first time we were treated to such revelations about massive revenue theft was during the Jonathan government’s administration. In 2013, President, the Ministers for Petroleum Resources and Finance actually and shamelessly told Nigerians that 400,000 barrels of Nigerian crude were stolen every day. Read my comments in an article titled WHO STEALS NIGERIA’S OIL.
“The Ministers of Petroleum and Finance, as well as the President have told us that 400,000 barrels per day is being stolen with the calm assurance that another 400,000 barrels will disappear tomorrow and next week. They stay in Abuja mostly, but they have staff in the oil producing areas. The questions that arise are: how do they know it is 400,000 a day? …. Is it possible that the home owner will continue to suffer the breaking and entry into his premises every night without taking measures to put a stop to it and to find out who is behind the relentless attack on his property? That is what the Federal Government will want us to believe. ”
That article ended by stating that the Jonathan government knew some of the oil thieves. The report recently that $69 billion is lodged in US banks tied to stolen Nigeria crude oil partly vindicates my position at the time.
AND NOW THE REPS EXPOSES NASS IRRESPONSIBILTY.
“Thus, this committee deemed it imperative to investigate revenue leakages and loopholes in the system that have contributed to the loss of over 30 billion dollars in annual tax revenue between 2005 and 2019.”
Member House of Representatives – James Faleke, June 28, 2021.
Communal lunacy can sometimes inadvertently be revealed, not by a lot of people going berserk; but by everybody keeping quiet when they are aware of uninterrupted evil. Fourteen years of annual leakages of $30 billion means that Nigeria has lost $420 billion or more than ten times our external debt as at 2021.
Look at it another way. It could also be inferred that, apart from the fact that we had no business going about borrowing, a great deal of what we borrow was actually going to cover the revenue stolen by so far unnamed individuals and groups. To be quite candid, only in a country no longer capable of being shocked, can such a revelation provoke silence. In fact, the Editor of the paper reporting it must be forgiven for tucking the biggest story of the day on page 9. This is front page stuff as a simple exercise in primary school arithmetic will illustrate.
Take 2019 for instance. In that year, the FG requested for approval for a $30 billion loan – mostly to finance expenditures favouring the Northern states which would benefit from 71 per cent of the proceeds. Virtually, every member of the NASS, now present was there. James Faleke was certainly there. Yet nobody challenged the request for loan since the Buhari administration allows $30 billion to be stolen under its watch. It does not require rocket-science intelligence to realise that, without putting strict financial controls in place, a lot of the $30 billion borrowed will again be stolen. Nigeria is the only country borrowing just to hand the dollars to official thieves.
ANNUAL REVENUE SHORTFALLS
“FG suffers N15tn shortfall in six years.” Report.
The most disturbing aspect of the incessant loan request lies in the fact that it reflects the irresponsibility of the Executive and the administrative arms of government. Granted, the President presents the national budget. But, in a well-governed democracy, the legislative branch has the power of the purse. Ultimately, they approve what they regard as prudent. Side by side with the power to decide how much to spend, they also have the duty of determining how the funds will be raised.
Incidentally, Nigerian military regimes were better disciplined about budgets. I represented VANGUARD at annual Budget Briefings from 1994 to 1998. Unfailingly, the Head of State presented next year’s budget on December 31 of the out-going year. It was front page news on all papers. Then, a week after, the Minister of Finance held a “Facts Behind the Figures Session”. This invariably involved top government officials, the Organised Private Sector, Media, Labour and diplomats. He would lay out the regime of taxes, tariffs, surcharges etc which would support government’s effort to generate the revenue target established in the budget. Each Ministry, Department and Agency knew what it was expected to contribute. Granted, the targets were not always achieved, even then; but stating them openly encouraged better performance with regard to revenue generation.
By contrast, there has been a great deal of laxity with the return of civil rule climaxing in what has happened in the last six years under Buhari. Revenue shortfall of N15tn in six years averages to N2.5tn per annum. In actual fact, the average hides a disturbing trend. In the last three years – 2018 to 2020 — the FG had generated less than 60 per cent of the revenue expected each year – mostly because the NASS has made it easy for the Executive branch to borrow and spend instead of embarking on raising Internally –Generated-Revenue, IGR, and plugging leakages and loopholes.
Among recent examples is the current probe of the Nigeria Ports Authority. NPA, for failure to remit various amounts in Naira and dollars. The NPA is actually a “dollar mint”. Several of its services are paid for in dollars. So, what government allows NPA to withhold is what we are going to borrow. A book, still in progress, asserts that the NPA, properly managed and all its revenue remitted to the Federation Account, can yield up to $6 billion a year. That is about 25 per cent of the budget for 2021.
The NPA is only an example. More worrisome is fuel subsidy; which is an economic absurdity. For the FG to allow fuel to be imported and sold at less than landing costs, at the same time we suffer revenue leakages implies willingness on the parts of the Presidency to perpetually borrow to repay old loans – not for investment and economic growth. Our government is actually working harg to impoverish Nigerians and enrich a few shady people. At this rate, we will never stop borrowing. Instead we run the risk of default. Then lenders will stop lending. We will be stuck and economic meltdown will follow.
The NASS is irresponsible; even if the FG is misguided.