By Akanimo Sampson
President Muhammadu Buhari’s administration has been entangled in the diversion of N543.63 billion Natural Resources Development fund. The Nigeria Extractive Industries and Transparency Initiative (NEITI) is accusing the administration of diverting the fund to fund the Independent National Electoral Commission (INEC) and budget deficit.
According to NEITI, the diverted N543.63 billion was also used to fund budget deficits, national security and Nigeria Armed Forces, among others.
This is coming as President Buhari directed the Ministry of Finance, Budget and National Planning to release N600 billion for Capital Expenditure in the next three months. He gave the directive in his nationwide broadcast to mark the country’s 59th Independence Anniversary on Tuesday in Abuja.
Buhari stated that the directive was informed by his administration’s desire to significantly increase investments in the nation critical infrastructure, pointing out that the implementation of the 2019 Capital Budget, which was only approved in June 2019, will be accelerated to ensure that critical priority projects are completed or substantially addressed.
He revealed that his All Progressives Congress (APC) administration had so far released N1.74 trillion for execution of various capital projects in the 2018 fiscal year. ‘’In this regard, we are significantly increasing investments in critical infrastructure. Last year, capital releases only commenced with the approval of the Budget in June 2018. As at 20th June 20 this year, up to N1.74 trillion had been released for capital projects in the 2018 fiscal year.’’
While noting that the exchange rate in the last three years had remained stable, with robust reserves of 42.5 billion dollars, up from 23 billion dollars in Oct. 2016, Buhari added that, to maximise impact, the federal government would continue to increasingly welcome and encourage private capital for infrastructure development through Public Private Partnerships.
“Through the Road Infrastructure Tax Credit Scheme, which I initiated in January this year, we are giving incentives to private sector inflow of over N205 billion in 19 Nigerian roads and bridges of 794.4km across in 11 States of the Federation. As we push to diversify the economy, we still remain focused on optimising the revenues generated from the oil and gas sector.
“We will be working with the Legislature, soon pass the Petroleum Industry Bill and amendments to the Deep Offshore Act and Inland Basin Production Sharing Contracts Act into law, to ensure Government obtains a fair share of oil revenues, whilst encouraging private sector investment,’’ the Nigerian leader said.
He however, maintained that his administration will also continue the fight against illegal bunkering of crude oil and the smuggling of refined petroleum products across the borders, pointing out that this will include the diligent prosecution and conviction of offenders found guilty of these acts.
Adding, he said “whilst Nigeria remains committed to free and fair continental and international trade, we will not hesitate to take all necessary steps to tackle illegal smuggling, transhipment and other predatory trade practices that destroy jobs in our country,’’ on power, Buhari reiterated his administration’s determination to reform the power sector to ensure speedy socio-economic transformation across the country.
“We are resolute in reforming the power sector. In August this year, we launched the Presidential Power Initiative to modernize the National Grid in 3 phases: starting from 5 Gigawatts to 7 Gigawatts, then to 11 Gigawatts by 2023, and finally 25 Gigawatts afterwards. This programme, in partnership with the German Government and Siemens, will provide end-to-end electrification solutions that will resolve our transmission and distribution challenges,’’ he said.
Buhari added that the programme will also localise the development and assembly of smart meters as well as the operations and maintenance capabilities of transmission and distribution infrastructure, and accordingly expressed delight with the improved inter-agency collaboration between the Ministry of Power and the regulators in the banking and power sectors to ensure that electricity sales, billings and collections were automated and become cashless.
“These initiatives are important to ensure that the technical and collection losses in the sector are substantially reduced. I remain confident that Nigerians will have affordable and uninterrupted electricity supply in the not too distant future. Our efforts to improve the power sector will complement other infrastructure investments projects under the Presidential Infrastructure Development Fund,’’ he said.
While acknowledging that the fund was investing in the Mambilla Power Plant project, as well as key economic road infrastructure such as the Lagos-Ibadan Expressway, Second Niger Bridge and Abuja-Kano Expressway, President Buhari expressed optimism that the first set of these projects remain on track to be completed by 2022.
In the mean time, NEITI said the sum of N543.63 billion was released for various projects from between 2012 and 2016, pointing out that a bulk of this amount was used to fund other sectors as opposed to the original purpose of establishing the fund.
Figures obtained from the latest Fiscal Allocation and Statutory Disbursement Audit 2012-2016 of the NEITI also showed that the N543.63billion disbursement from the natural resources fund outstripped inflows by 11 per cent.
The report stated, “the Natural Resources Development Account was established to develop alternative mineral resources. The total revenue received from 2012 to 2016 was N486.26 billion. Out of this amount the statutory allocation was N374.15 billion from both mineral and non-mineral revenue.
“A review of disbursement showed that N543.63bn was released for various projects in the period, meaning disbursement outstripped inflows by 11 per cent. Contrary to the purpose of the fund, it served as a borrowing fund for the Federal Government to meet its obligations in areas such as budget deficits, national security, Independent National Electoral Commission, Nigeria Armed Forces, among others.’’
NEITI has also revealed that the revenue paid into the Ecological Fund were utilised for purposes other than which the fund was established. The Ecological Fund is an intervention facility established to address serious ecological problems across the country.
“The utilisation of the fund does not match the purpose for which the fund was established. For instance, for the loan of N93, 768,951,164 released to the Federal Government for funding of budget deficits and advance to states and Local Governments to meet shortfalls in their revenue,’’ NEITI said.
While the report pointed out that statutory allocation in the Ecological Fund between 2012 and 2016 was N276.5 billion, while receipt from excess crude oil was N54billion, it further analysed the country’s Stabilisation Fund, adding that it served as a pool to grant loans to various non-related expenditures during the period under review.
According to NEITI, this fund served as a mechanism set up by government to insulate the economy from large influxes of revenue from commodities such as oil. It is to also maintain steady level of government revenue in the face of major commodity price fluctuations.
A total sum of N238 billion was received as revenue into the Fund from 2012 to 2016. Most of the disbursements made from the fund were described as loans but most of the loans granted seem not to be recoverable.
For the country’s Excess Crude Account, ECA, which was created to warehouse the excess amount resulting from increases in crude oil prices, the report stated that total transfers to ECA within the period under review was N4.35 trillion, noting that the objective of the ECA was to use the proceeds as an augmentation tool if there was a shortfall in the revenue, and then added that there was a legitimacy/constitutional issue as the Excess Crude Account had no constitutional backing.
