There are concerns in government circles that the country’s revenue projection for the 2013 fiscal year may not be realised.
Saturday PUNCH learnt that the gross oil revenue accruing to the Federation Account had dwindled seriously in recent times.
The drop in revenue has raised fears that the Federal Government may
not be able to implement the 2013 budget. Sources in government
attributed the drop to massive oil theft, illegal bunkering and pipeline
vandalism.
Figures obtained by this newspaper, showing the monthly
allocations to the three tiers of government by the Federation Accounts
Allocation Committee, revealed that the country only realised N3.893tn
as gross federally collected revenue in the first six months of 2013.
This sum, according to an analysis of the document, showed a shortfall
of N321.73bn against the projected revenue of N4.215tn that was
projected for the country for the six months period.
According to
the FAAC document, the monthly budgeted gross federally collected
revenue for the country is put at N702.54bn. This is expected to be
realised from three revenue sources – mineral revenue, N465.057bn;
non-mineral revenue, N158.711bn and Value Added Tax, N78.77bn.
However, further investigations revealed that the N3.893tn revenue for
the first half of this year was earned as follows: January, N651.26bn;
February, N571.7bn; and March, N595.71bn. In the months of April, May
and June, revenue receipts by the country were N621.07bn,
N590.77bn and N863.02bn respectively.
In the same vein, the country recorded significant revenue drop between January and May.
The shortfalls were recorded as follows; January N51.28bn; February
N130.84bn; March N106.84bn, April N81.47bn and May N111.77bn. Curiously,
there was a surplus of N160.48bn in June as the country’s revenue
receipts of N863.02bn exceeded the budgeted sum of N702.54bn owing to
completion of pipeline repairs in some terminals.
It was gathered
that unless the revenue generating agencies step up their efforts and
leakages in the oil sector were taken care off, the country might only
realise about N7.78tn for the 2013 fiscal year instead of the projected
N8.43tn going by the first-half revenue trend.
During the week, the
Coordinating Minister for the Economy and Minister of Finance, Dr Ngozi
Okonjo-Iweala, said that the country was losing 400,000 barrels of crude
oil per day to illegal bunkering and vandalism of oil pipelines.
Okonjo-Iweala, who appeared before the House of Representatives Joint
Committee on Appropriation/Finance in Abuja last Tuesday, had said, “We
are losing revenue; 400,000 barrels of crude oil are lost on a daily
basis due to illegal bunkering, vandalism and production shut-in.
“I
have to clarify that it is not as if the entire 400,000 barrels is
stolen, no. What happens is that whenever the pipelines are attacked and
oil is taken, there is a total shut down. All the quantity of oil
produced for that day will be lost because it means government cannot
sell it and it means a drop in revenue.”
The minister explained that
this was the reason President Goodluck Jonathan sought to amend the
2013 Appropriation Act as against sending a supplementary budget to the
National Assembly.
She pointed out that with the revenue shortfalls
currently facing the country, there was no way the government could
afford a supplementary budget.
Okonjo-Iweala told the committee,
“You cannot talk of supplementary budget when your revenue is going
down. That is why we are asking for an amendment to restore the money
that was removed.”
Worried by the shortfall in revenue, the Federal
Government had constituted a committee headed by the Governor of Bauchi
State, Alhaji Isa Yuguda, to address the oil theft problem.
Other members of the committee are the Governors of Delta, Dr. Emmanuel Uduaghan; Anambra, Mr. Peter Obi; and Gombe,
Alhaji Ibrahim Dankwambo.
The rest are the Minister of Finance, Director General of the Budget
Office of the Federation, Dr. Bright Okogu; and the Accountant General
of the Federation, Mr. Jonah Otunla.
Okonjo-Iweala said the committee had also resolved to address the root cause of the revenue challenges facing the country.
Reacting to this development, the Managing Director, Financial
Derivatives Company Limited, Mr. Bismarck Rewane, warned that a revenue
drop could hurt the nation’s economy.
Rewane said, “If indeed about
400,000 barrels of crude oil are lost every day, that’s about 20 per
cent of daily oil production. Remember crude oil is the mainstay of
Nigeria’s economy. If they take away 20 per cent of your salary, you
know how that will affect you. Nigeria cannot survive on what will be
left if that amount of revenue is lost every day.”
But a public
intellectual and economist, Henry Boyo, expressed surprise that Nigeria
had lost so much to oil bunkering despite the huge sums government had
spent to secure oil facilities and pipelines.
“It is quite
surprising that despite the huge amount that has been spent by the
Federal Government to put in place security patrols on the coasts of the
Niger Delta, oil bunkering has reached this stage. ,” he said.
Also, political economist, Pat Utomi, said the diversification of the
nation’s revenue streams, and not worries about a drop in revenue,
should be government’s immediate concern.
He said, “I have always
belonged to the school of thought that suggests that only a small
percentage of the oil revenue should be shared between the tiers of
government
“I have even suggested, even though with tongue in cheek, that Nigeria should cap its oil wells so that we
can make a conscious effort at developing other sectors. All kinds of
individuals who should not have been anywhere near governance are
running to become public servants because of oil revenue.
“We have
been killing other sectors of our economy. Maybe we need to be broke to
return to our senses and dedicate more time to other sector such as
agriculture, and manufacturing,” the economist said.
Source: Punch
