How Buhari Spent N2.6trillion Oil Revenue Without NASS Appropriation In 2021, Made Unclear Payments Under Fuel Subsidy Regime
The Nigeria Extractive Industries Transparency Initiative (NEITI) report has stated that former President Muhammadu Buhari-led Nigerian government spent US$6.931billion which is equivalent to N2.651 trillion as quasi-fiscal expenditure in 2021 without the National Assembly appropriation.
The NEITI, which revealed this in its 2021 oil and gas report obtained by SaharaReporters, stated that the money was deducted from the Federation’s revenue before remittance without appropriation by the National Assembly.
The NEITI in parts of its observations and findings further stated that the circumstances for the loans taken in the past to settle marketers under the fuel subsidy scheme, which are being recovered from the monthly Federation revenue proceeds under Pre-export financing and Project Eagle agreement still remained unclear.
Also, according to the report, the agreement on cash call financing by the Nigerian Liquefied Natural Gas (NLNG) involving Federation Joint Ventures (JVs) also requires further clarifications.
The NEITI therefore demanded that the pre-export financing arrangement and all other loan arrangements in exchange for crude oil and gas should be extensively reviewed and investigated.
The report on Page 136 read, “Observations, Findings and Recommendations; Observations and Findings; 1. In 2021, the total sum expended as quasi-fiscal expenditure amounted to US$6.931billion (equivalent N2.651trillion). These amounts were deducted from
Federation’s revenue before remittance without appropriation by National Assembly.
“2. The circumstances for the loans taken in the past to settle marketers under the Petroleum subsidy scheme, which are being recovered from the monthly Federation revenue proceeds under Pre-export financing and Project Eagle agreement remains unclear.
“3. The agreement on cash call financing by NLNG involving Federation JVs requires further clarifications; Recommendations; 1. There is the need to ensure adequate oversight over the expenditures that are not captured in the National budget.
“2. NNPC should transparently disclose details of the subsidy and the beneficiaries of the payments, in addition to rendering accounts on the loan transaction. 3. The pre-export financing arrangement and all other loan arrangements in exchange for crude oil and gas should be extensively reviewed / investigated.”
Recall that NEITI had also raised concerns over the unremitted gas royalty payments of $559.8 million and another unpaid sum of $828.8 million gas flare penalty to the Nigerian government.
The NEITI’s Executive Secretary, Dr Ogbonnaya Orji, who also outlined the conditions while speaking as special guest at the 2nd German-Nigeria Symposium on Green Hydrogen held in Abuja earlier this month, stated that more gas was flared in Nigeria during the period it reviewed than utilised.
Orji had explained that with the United Nations projection of Nigeria’s population to rise to over 260 million in 2030 and over 400 million in the year 2050, there was an urgent need for deliberate investments in technology, innovation, exploration, production and commercialisation of gas for Nigeria to meet the net zero target set for the year 2060.
According to him, “A breakdown of the unremitted payments in the report, showed outstanding gas royalty payments of $559.8 million and another unremitted sum of $828.8 million from unpaid gas flare penalty, confirming that more gas was flared in the country during the period than utilised.”
The NEITI in its report had also noted that the situation is posing serious dangers to the global zero emissions agenda apart from huge revenue loss to the country.
Hence, Orji said that “Nigeria has identified natural gas as its transition fuel. At over 200 trillion cubic feet, Nigeria has the largest gas reserves in Africa and 9th largest in the world.
And with increasing new gas discoveries on the way from ongoing frontier explorations across the country, NEITI believes that gas will play a very important role in the energy transition discussion.
“As you know, gas has the potential to produce blue hydrogen, which, though not as clean as green hydrogen, would be useful in our journey towards cleaner energy sources.”
