Mineral, Non-mineral Resources Contributed N12.8trn to Nigeria’s N28.02trn Revenues in Three Years

* Federating units’ over-dependence on federation account hits 71%

* 81% of allocations to states spent on recurrent expenditure 

Emmanuel Addeh

Revenues from minerals and non-mineral resources contributed N12.84 trillion (56.61 per cent) and N6.57 trillion (28.97 per cent) respectively, the Nigeria Extractive Industries Transparency Initiative (NEITI), disclosed yesterday.
Also, Value-Added Tax (VAT) accounted for N3.27 trillion (14.42 per cent)  of the federal government’s income between 2017 and 2019.
According to the organisation, four agencies generated a total of N28.02 trillion during the period under review, including the Nigerian National Petroleum Corporation (NNPC); Federal Inland Revenue Services (FIRS); Department of Petroleum Resources (DPR) and the Ministry of Mines and Steel Development (MMSD).
Out of the amount, NEITI in its latest Fiscal Allocation and Statutory Disbursement (FASD) report, stated that N22.68 trillion 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, it stated.
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 utilisation and application of the funds by the beneficiaries between the years 2017-2019.
It stated that the audit covered four federal revenue generating and 11 beneficiary agencies that are involved in the management of extractive industries funds.
The report also covered nine selected states: Akwa-Ibom; Bayelsa; Delta; Gombe; Imo; Kano; Nasarawa; Ondo and Rivers states.
It revealed that FIRS generated the sum of N13.48 trillion within the period under review with Petroleum Profit Tax (PPT) accounting for N5.80 trillion (43.09 per cent), while VAT and other taxes accounted for 32 per cent and 24 per cent respectively. The organisation recorded highest revenue collection of N5.02 trillion in 2018.
It disclosed that a total sum of N8.82 trillion was generated by the NNPC within the period with breakdown showing that N4.55 trillion came from domestic crude sales, while export receipts accounted for N4.27 trillion.
It further stated that N5.33 trillion was deducted at source for JV cash calls and others, leaving the net amount of N3.49 trillion as transferred to federation account.
“During the period under consideration, a total of N8.82 trillion was generated. However, only N3.49 trillion (39.55 per cent) 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,” the NEITI report stated.
From the report, the defunct DPR, NEITI stated, generated N3.53 trillion in the three years under review, with royalty payments accounting for N3.40 trillion (96.41 per cent). The agency however transferred N3.53 trillion to the federation account. The audit established that the surplus of N6.72 billion was as a result of unremitted receipts from prior year.
According to NEITI, the ministry of mines and steel development generated N12.498 billion within the three years period. A breakdown showed that the Mining Inspectorate Department (MID) contributed N6.43 billion while Mining Cadastral Office (MCO) accounted for N6.06 billion. From the total revenue generated by the ministry, a sum of N7.56 billion was shared to the three tiers of government in 2019.
On the Niger Delta Development Commission (NDDC), NEITI said that N755.96 billion was generated by the commission within the period under consideration.
A breakdown showed that N551.08 billion (73 per cent) was contributed by oil and gas companies, while the balance of N203.90 billion (27 per cent) was federal government’s contribution to the commission.
The report further revealed that the total expenditure by the commission during the period under review was N882.3 billion with an analysis of the expenditure showing that N778.29 billion (88.20 per cent) was expended on development projects, while operational cost accounted for N104.07 billion (11.80 per cent) of the total.
Furthermore, an analysis of project execution in member state ranked Delta state highest in terms of development projects undertaken by the commission to member states with total expenditure of N40.46 billion (26 per cent) of the actual expenditure within the period, while Edo received the lowest development projects of about 5 per cent.
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 N522.60 billion.
“While N679 billion was reported in NDDC’s financial statement, the project monitoring list reported expenditure of N157 billion on physical projects among the nine member states” the 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, saying it obviously negatively affected revenue inflow into the commission within the period.
On the Tertiary Education Trust Fund (TETFund), NEITI reported that the fund realised N644.19 billion within the three years under review. It also established that the actual funds available for disbursement by TETFund in the three years period was N624.32 billion.
The report also disclosed that the sum of N102.14 billion (46.55 per cent) was disbursed to the universities, while N46.12 billion (21.35 per cent), N49.97 billion (21.97 per cent) and N27.09 billion (10.12 per cent) were disbursed to Polytechnics, Colleges of Education and other tertiary institutions programmes respectively.
NEITI noted that the process of accessing the fund was cumbersome and called on TETFund to simplify the process to enable more universities access the funds.
The Petroleum Technology Development Fund (PTDF) revenue for the period under review was put at N155.34 billion and 95 per cent came from signature bonuses paid by oil and gas companies which is the main revenue source of funding by the agency.
The NEITI report revealed that out of N86.34 billion utilised by the agency within the period under review, N59.84 billion was spent on core operating expenses while N26.35 billion and N143 million 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 56 per centof revenue was utilised.
NEITI report put total receipts by Nigeria Content Development and Monitoring Board (NCDMB) for the three years under review at N126.73 billion. It
For the Nigerian Sovereign Investment Authority (NSIA), NEITI disclosed that the total financial flows for the three year period were N1.33 trillion while that of the defunct Petroleum Product Pricing Regulatory Authority (PPPRA) was N27.68 billion as federal government subvention for the three years period.
The Ecological Fund (EF) recorded a total sum of N170.15 billion during the period under review with statutory allocation accounting for the 93.43 per cent of the total revenues.
It revealed that the North-central received the highest projects in the sum of N36.08 billion, while South-south received the lowest projects delivered amounting to N10.93 billion. The report also revealed that National Emergency Management Agency (NEMA) received N34.04 billion from the Fund.
The report disclosed that the three tiers of government shared N19.01 trillion mineral revenue during the period under review. A breakdown showed that the government received the sum of N8.85 trillion while N5.80 trillion and N4.36 trillion were received by the 36 States and Local Governments respectively.
A comparison of allocation per geo-political zones revealed that south-south states received the highest allocation during the period under review in the sum of N5.17 trillion (26.54 per cent) while southeast received the lowest allocation of N2.12 trillion (10.91 per cent).
A state by state analysis of revenue allocations within the period under review shows that Delta state received the highest allocation of N1.24 trillion while the Federal Capital Territory received the lowest allocation of N110 billion.