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Business News of Wednesday, 29 September 2021

Source: punchng.com

FG releases fresh debtors’ list Nov, 77 oil firms owe N2.66tn

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The indebtedness of 77 oil and gas companies to the Federal Government is now N2.66tn, the Nigeria Extractive Industries Transparency Initiative said on Tuesday.

NEITI’s Executive Secretary, Orji Ogbonnaya-Orji, who said this in Abuja while speaking on the status of EITI implementation in Nigeria, said the 77 firms carried out their operations across the country.

Our correspondent also gathered that NEITI would publish fresh list of indebted oil firms that would give anti-corruption agencies including the Economic and Financial Crimes Commission to go after the defaulting organisations.

Ogbonnaya-Orji explained that the N2.66tn debt arose from failure to remit petroleum profit tax, company income tax, education tax, value added tax, withholding tax, royalty and concession on rentals.He explained that the total liabilities of the 77 companies were captured in the agencies’ 2019 independent audit report of the oil and gas sector.

Ogbonnaya-Orji said, “The NEITI reports based on findings in its 2019 audit of the oil and gas sector show that oil and gas companies in Nigeria owe government about $6.48bn, which equals N2.66tn at today’s exchange rate of N410.35.

“A breakdown of the figures show that a total of $143.99m is owed as petroleum profit taxes, $1.089bn as company income taxes and $201.69m as education tax.“Others include $18.46m and £972,000 as Value Added Tax, $23.91m and £997,000 as withholding tax, $4.357bn as royalty oil, $292.44m as royalty gas, while $270.187m and $41.86m were unremitted gas flare penalties and concession rentals respectively.”

The NEITI boss said the disclosure was important in view of the government’s current search for revenue to address the demand for steady power, good roads, quality education, fight against insurgency and job creation.

“A comparative analysis of what this huge sum of N2.66tn can contribute to economic development shows that it could have covered the entire capital budget of the Federal Government in 2020 or even be used to service the Federal Government’s debt of $2.68bn in 2020,” Ogbonnaya-Orji stated.

He added, “In 2021, if the money is recovered the N2.66tn could fund about 46 per cent of Nigeria’s 2021 budget deficit of N5.6tn and is even higher than the entire projected oil revenue for 2021.”This, he said, was why NEITI had decided to work with the government to provide relevant information and data to support efforts at recovering this money.

“We therefore appeal to these companies to ensure that they remit the various outstanding sums against them before the conclusion of the 2020 NEITI audit cycle to the relevant government agencies responsible for collection and remittances of such revenue,” he stated.The transparency agency boss cautioned oil firms that NEITI would no longer watch while these debts continued to remain in its reports unaddressed.

He stressed that NEITI would provide all necessary information and data to sister agencies and anti-corruption organisations whose responsibilities were to recover the debts into government coffers.

On whether the agency was partnering law enforcement agencies to recover the N2.66tn from the 77 companies, Ogbonnaya-Orji replied in the affirmative.“We will also share the information and data with our partner anti-corruption agencies with whom we have signed MoUs,” he said.

He explained that in the past seven months, NEITI had held series of meetings and consultations with diverse stakeholder groups involved in the EITI process.He said, “The outcomes of these engagements have culminated in the signing of Memorandum of Understanding with some of them to support NEITI in the implementation of the EITI in Nigeria.

“MoUs were signed notably with the Economic and Financial Crimes Commission; Independent Corrupt Practices and Other Related Offences Commission; and the Nigerian Financial Intelligence Unit.”Ogbonnaya-Orji also stated that agency was strengthening the powers and functions of NEITI through an amendment of the NEITI Law enacted since 2007.He said the amendment was to align the law with EITI emerging issues, the new Petroleum Industry Act and ongoing reforms in the industry.

Oil firms’ HQ: OICs excuse of insecurity untenable, says PANDEFOil firms borrowed N130bn from banks in February – CBN He stated that a gap analysis was developed on the present law and a draft review sent to the Attorney-General of the Federation and the Secretary to the Government of the Federation.Ogbonnaya-Orji said his agency had received commitment from the SGF’s office on the matter.

He also stated that the office of the Attorney-General of the Federation was working with NEITI on the subject.Officials at NEITI stated that the debtor firms had been informed to pay up, while the anti-corruption agencies had been notified about the situation and the need to recover the fund.This came as the Petroleum and Natural Gas Senior Staff Association of Nigeria charged the Federal Government to collect the assets of perpetual debtor firms through the Asset Management Corporation of Nigeria.

The Deputy Director/Head Communications and Advocacy, NEITI, Obiageli Onuorah, told our correspondent that informing and urging the debtor companies to pay up was the first phase of the recovery process.

She said, “The first phase is what we are on right now. We’ve alerted the companies to pay back. By the time we conclude our 2020 audit report, we will now check to see if they have paid.“The 2019 audit was concluded in December 2020 and presented to the public in May this year, as the affected debtor companies were also notified.

“Now, the 2020 audit report will validate if these payments have been made by the companies. Our audit reports are published annually. Plans are on to release the 2020 report by November this year.”Onuorah added, “So it is only when that report is concluded that we can verify or confirm that they have paid or not. And after that we will now have meetings with the anti-corruption agency and commence the process of recovery.

“But for now, we are just alerting them that these monies need to be paid back into government coffers. So we can only confirm if these monies have been paid when we conclude the 2020 audit report, which we intend to release by November this year.”When probed further to give some of the names of the debtor companies, Onuorah replied, “No we cannot, because I can give you the name of a company and the company that I gave you its name has paid back.

“This is because they (the companies) know that we are pushing for them to pay back this money. So if I give you the name of a company and it was discovered that the company paid back in July, you know it won’t be right.“So until the audit report for 2020 is concluded, then we can compile the names of all the outstanding payments again and commence the process of recovery.”General Secretary, PENGASSAN, Lumumba Okugbawa, argued that it was unfair for oil firms to owe the country such amount at a time when Nigeria was looking for funds to boost the economy.

He encouraged the government to charge AMCON to take over the assets of debtors who may have refused to repay their debts. Okugbawa said, “They (government) should recover the fund. They have AMCON and all other agencies. For any organisation that is owing and cannot pay AMCON should take it over.

“It is also part of governance to make sure that people who are owing should pay up their debts because that is what is used to sustain the economy.“And it is a bad business strategy that you allow people to owe you such an amount at a time when the country is looking for money to fund its budget.”Okugbawa, however, encouraged the defaulting oil companies to comply with the demands of NEITI and pay up their debts.