N16.25trn oil theft loss: FG must remodel strategies for extractive industries
Records of losses within Nigeria’s extractive industries have been at huge disadvantage to the growth of the country’s economy. Issues of theft, wastage and other shortfalls from unregulated activities around the extractive sectors have over the years formed the basis of leakages that left the country with huge losses. From the oil sector to solid minerals, the losses have been capital to the disadvantage of sector and macro economic growth.
In the oil sector, the issue of theft has been capital in profile. Recently a report by the Executive Secretary of Nigeria Extractive Industries Transparency Initiative (NEITI), Ogbonnaya Orji disclosed that the sum of N16.25 trillion was lost to unabated crude oil theft, based on data collated and signed off by the operators and other stakeholders in the industry.
The NEITI boss in a report on the $74.386billion spent on fuel subsidies by successive governments since 2011 submitted to the House of Representatives Committee on Public Accounts and handed over to the Chairman, House Committee on Public Accounts, Bamidele Salam, during an interactive session in Abuja, the NEITI boss also unmasked over $8.3billion unremitted revenue by some privately-owned oil companies and Federal Government-owned agencies, which was not paid into the Federation Account contrary to extant financial regulations.
”I have here, for instance, revenues we have earned from oil and gas since 1999. We also have here all the subsidy payments made. Since 2005 when it became a scandal, we began to collect the data. We began to ask questions on subsidy and as of 2021, the country had paid $74.386bn in subsidy. And we have a breakdown of what was paid each year. We have also got a conversion of what that can possibly translate to,” he said.
On losses to crude oil theft, the NEITI boss had said, “In the course of this job, we have incentivised a lot of recoveries for the government because between what is paid and what was recovered, a lot of money in foreign exchange developed wings. Company A will say we paid $1million and you go to the account of the receiving agency and you find out that either half of that money was not received or more is received more than what was paid because of poor record keeping and carelessness.
“In that report alone, over $8.3billion were unremitted funds on the part of some government agencies and companies. Our concern is that this is at a time when the government is going borrowing. So, we bring this information with incisive and empirical information and data with evidence and table it.
“We have also released the same report on the solid mineral sector and all the information and data are provided. On the 9th of November, we are releasing the last report for the year, which is on fiscal allocation and statutory disbursements,” he had said.
Given the depth of loss records in the extractive industries, it is pertinent the Federal Government remodel its strategies to combat the structural leakages which have made theft in the sectors of concern a deal of impunity.
For NEITI, it is important for the agency to strengthen collaboration with anti graft agencies to further drive its discoveries to yield recoveries. Working with the Economic and Financial Crimes Commission, the Independent Corrupt Practices and Related Offences Commission as well as Nigeria Financial Intelligence Unit to retrieve stolen funds into the federation account is important, particularly at a time when revenue shortfalls is posing difficult strains on the government, with undue recourse to borrowings.
While the National Assembly, particularly through the Public Accounts Committee organs has been launching inquiries into the dealings in the extractive industries, it is essential that the chambers of the federal legislative organ fight a just course in sincerity and dedication to re-position the response model to the workings of the extractive sectors.
