By John Ikani
The Nigerian Extractive Industries Transparency Initiative (NEITI) audit report for 2019, shows that oil and gas companies in Nigeria owe the government $6.48 billion, about N2.659 trillion based on the official exchange rate of N410.35 to a dollar.
A breakdown of the figures shows that a total of $143.99 million is owed as petroleum profit taxes, $1.089 billion as company income taxes and $201.69 million as education tax.
Others include $18.46 million and $972,000 as Value Added Tax (VAT), $23.91 million and $997,000 as Withholding Tax, $4.357 billion as royalty oil, $292.44 million as royalty gas, while $270.187 million and $41.86 million were unremitted gas flare penalties and concession rentals respectively.
The nation’s Debt Management Office (DMO) had said that Nigeria’s Public Debt Stock stood at N33.107 trillion (about $87.239 billion), as at March 31, 2021.
Earlier this month, President Muhammadu Buhari had approached the National Assembly to approve borrowing of another $4 billion ($4,054,476,863) and €710 million loan from bilateral and multilateral organisations to fund the deficit in the 2021 budget.
If recovered, the $6.48 billion would have provided the country a leeway without necessarily borrowing.
In May, President Buhari approached the lawmakers to borrow $6.1 billion from bilateral and multilateral organisations to fund the deficit in the 2021 budget, whereas the 2019 debt of the oil companies alone is higher than the borrowing.
Senate President, Ahmad Lawan, had announced that the National Assembly would continue to approve foreign loan requests by the Presidency despite the debt burden, because the country had no option than to borrow for critical infrastructure.
Already, the Federal Government has planned to spend about N13.98 trillion in the implementation of its 2022 budget. With expected revenue of N8.76 trillion, Nigeria would sink deeper into debt, with an addition of N5. 22 trillion to its existing debt profile.
The accumulation of the N5.22 trillion deficit, if added to ongoing borrowing in 2021, may have successfully pushed the country’s debt profile to N40 trillion ahead of the 2023 general election.
Data available to NEITI indicates that 77 companies (including international and Nigerian owned oil and gas companies) owe debts, which arise from failure to remit petroleum profit tax, company income tax, education tax, value added tax, withholding tax, royalty and concession on rentals, Executive Secretary of NEITI, Dr. Orji Ogbonnaya Orji, disclosed while delivering a presentation at a media briefing in Abuja.
The oil sector debt, coming at a time that government is borrowing, could have covered the entire capital budget of the Federal Government in 2020.
Indeed, the figure is enough to service debt of $2.68 billion in 2020, as Orji noted that in 2021, the 2.659 trillion could fund about 46 per cent of Nigeria’s 2021 budget deficit of N5.6 trillion, and higher than the entire projected oil revenue for 2021.
“This is why it is important that the process of recovering this humongous sum be set on course to support government in this period of dwindling revenue.
“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.
“NEITI will no longer watch while these debts continue to remain in its reports unaddressed. We will provide all necessary information and data to sister agencies, including anti-corruption agencies, whose responsibilities are to recover these debts into government coffers,” Orji said.