Underperformance in Extractive Sector Costs Nigeria N1trillion in One Year

The Senate President, Bukola Saraki, on Thursday, June 2, stated that Nigeria lost over N1trillion in 2013 in the extractive sector.

As a result of the loss, the Upper chamber resolved to invite the Executive Secretary of the Nigeria Extractive Industry Transparency Initiative (NEITI), Waziri Adio, to brief it on the content of the 2013 Audit report of the agency.

Saraki said if the 2016 budget figure is N6 trillion, N1 trillion could not be lost in one sector without the Senate finding out what happened.

The resolution followed a motion on “the urgent need for the Senate to look into the NEITI 2013 oil, gas and solid mineral audit report” sponsored by Senator Tijjani Yahaya Kaura (Zamfara North).

Senator Kaura in his lead debate noted that one of the key statutory functions of NEITI is to conduct regular audit of the extractive sector as provided in Section 4 of the Extractive Act.

He said details of the report showed that the country made $58.07 billion from its hydrocarbon industry in 2013, while N33.86 billion was realised from the solid mineral sector the same year.

He said the report also indicated that $3.8billion and N358.3 billion stood as outstanding revenue from the Nigeria National Petroleum Corporation (NNPC) and its subsidiaries during the review period.

The outstanding payments, he said, were due to unpaid consideration from divested Oil Mining Lease (OML) from NNPC and National Petroleum Development Company (NPDC) and cash call refunds by the National Petroleum Investment Management Services (NAPIMS).

Kaura said it was worrisome that between 2005 and 2013, $12.9 billion paid by the Nigerian Liquefied Natural Gas (NLNG) to NNPC was not remitted to the Federation Account.

The report showed that Nigeria lost $5.966 billion and N20.4 billion in the sector from the operation of Offshore Processing Agreements (OPA) by state oil firm, the NNPC and crude oil swap and theft.

He noted that the report also showed that $99.98 million was reported as underpayment to the Federation Account from petroleum profit tax and royalties by oil and gas companies, as a result of the use of different pricing methodology by the government.


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