The Federal Govern­ment has indicted some revenue-gener­ating agencies, often regarded as ‘juicy’ parastatals, for squandering over N1 trillion on bogus salaries and allowanc­es for their workers.

The government, which de­clared the situation as no long­er acceptable, has resolved to bring the affected agencies to book and stop further wastage of public funds on unauthor­ised personnel emoluments.

The lid on the illegal activ­ities of the agencies was blown open by the Minister of Fi­nance, Mrs. Kemi Adeosun.

She accused the agencies of generating about N1.5 trillion yearly but spending 90 percent of it on recurrent expenditure of their workers.
Adeosun made the disclo­sure at the National Economic Council (NEC) meeting chaired by Vice President Yemi Osinba­jo at the State House, Abuja.

The NEC meeting was attend­ed by state governors, the Secretary to the Government of the Feder­ation (SGF), Babachir Lawal, and the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu.

Briefing newsmen after the meeting, Anambra State Gover­nor, Willie Obiano, explained that Adeosun briefed the NEC on the financial abuses being committed by the agencies.

The companies, he said, have been involved in the illegal acts in the last 10 years.
He said that “the Finance Min­istry reported to the Council cer­tain activities of some revenue-generating agencies that amounted to financial abuse of the revenues they generate.

The profligate spending of the agencies include paying sala­ries above Revenue Mobilisation and Fiscal Allocation Committee (RMFAC) specifications; convert­ing official cars to personal own­ership; monetising medical al­lowances arbitrarily; unapproved overseas’ trips; lavish training al­lowances, and excessive person­al loan approval, including unap­proved mortgages.

“The Ministry of Finance and RMFAC are working together to rein in these abuses as these reve­nue agencies raise as much as N1.5 trillion and spend almost 90 per­cent on their recurrent expendi­ture.

“The minister added that this has been going on for a decade, but such financial abuses where­by the agencies hide the revenues that ought to go to the Federation Account will now be exposed and terminated,” the governor said.

Adeosun also disclosed that the excess crude oil proceeds as at November 2016 stood at $2.4 bil­lion, while budget support loan fa­cility of $1.1 billion was disbursed in October to 35 states, making a total of $6.3 billion now released to the states.

On the N2 billion Ecologi­cal Fund said to be paid to states by the last administration, which some states complained they did not benefit from, the NEC resolved to investigate it and report its find­ings to the President.

Meanwhile, with the govern­ment’s decision to end its Joint Ven­ture Cash (JVC) calls with oil com­panies next year, Kachikwu said that the country will attract invest­ments in excess of $15 billion from the affected firms.

Kachikwu brought the propos­al to change the funding configura­tion of JVC for upstream compa­nies for endorsement by the NEC at its meeting on Thursday.

The minister told State House Correspondents after the NEC meeting that the current cash call arrears in the oil sector over the last five years up to December 2015 was about $6.8 billion, whereas as at 2016, the government had accu­mulated unpaid cash call arrears of over $2.5 billion.

The debts accumulated due to the failure to pay the joint cash calls when global crude oil price was selling for between $110 and $120 per barrel, he said, noting that it had now become difficult to pay them off as a result of the Niger Delta militancy and the drop in oil prices to $40 per barrel.

“When that happens, you find that your reserve begins to deplete, your ability to maintain produc­tion at current level will begin to dissipate and the cost of oil per bar­rel of production at joint ventures continues to rise because of the very little volumes chasing the cost and at the end of the day, the inves­tors’ confidence begins to wane.“So, a lot of the projects that ought to have happened in this country were basically aban­doned,” the minister said.

He said a sustainable solution to this has however been found by the Nigerian Petroleum Corpora­tion (NNPC) and the Ministry of Petroleum.

According to him; “what we have been able to put together has enabled us to save over $1.7 billion for the government on the $6.8 bil­lion that was previously owed. So, we are going to be owing only $5.1 billion as opposed to $6.8 billion.”
“The $5.1 billion will be paid within five years interest-free and the more funds will come from in­cremental barrels of oil generated by the oil companies apart from the current 2.2 million barrels”, Kachikwu explained.

He explained further that if for any reason the government did not meet the thresholds, it would not be able to pay the $5.1 and the $2.6 billion outstanding for this year.

Kachikwu added that he ex­pected the barrel reserve produc­tion to increase to about 2.5 mil­lion by 2019 and potentially to about 3 million barrels by 2021.

Source: AUTHORITY