Reps Direct NNPC To Remit $2BN In Unpaid Taxes, Approve MTEF/FSP

The House of Representatives on Wednesday directed its Committees on Finance, and Petroleum (Upstream and Downstream) to investigate allegations of financial irregularities by the Nigerian National Petroleum Corporation (NNPC). The probe follows reports from the Revenue Mobilization, Allocation, and Fiscal Responsibility Commission, which claim that the NNPC withheld N8.48 trillion in purported subsidies for petrol.

The investigation will also address the NEITI report stating that NNPC failed to remit $2 billion (N3.6 trillion) in taxes to the Federal Government. Additionally, the committees will verify the total cumulative amount of unremitted revenue (under-recovery) from the sale of petrol by the NNPC between 2020 and 2023.

In another development, the House approved the 2025-2027 Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP) ahead of next week’s presentation of the 2025 Appropriation Bill to the National Assembly by President Bola Tinubu.

The MTEF/FSP sets the oil benchmark for 2025 at $75 per barrel, with oil production projected at 2.06 million barrels per day. The government also pegged exchange rate parameters at N1,400 per dollar and a projected Gross Domestic Product growth rate of 6.4 percent per annum.

However, the Minority Leader of the House, Kingsley Chinda, questioned the rationale for projecting a 2.06mbp in 2025, arguing that the current production volume is 1.05mbpd. Chinda suggested reducing the target rate to 2 million barrels per day, which has always been the country’s target.

Chinda said, “Because of the importance and sensitivity of MTEF, I will advise that we consider it thoroughly before we pass. This is one of the most important bills this parliament will ever pass. They recommend a $75, $76.2, and $75.3 benchmark per barrel of crude for 2025, 2026, and 2027 respectively.”

“We are aware that for 2024, what we recommended was $77.96, which is the current budget. Today, it is about $85 per barrel. That is, in the first quarter of 2024, we achieved $85 and it increased further. If we are recommending $75 for next year which is one month away against the $77 we recommended for this year, I will advise that we retain the minimum we adopted for this year.”

“Rather than increasing, we are reducing, I am not unaware of the issue of moving to gas-propelled vehicles, leaving fossil fuel. I am aware that the world is moving that way and reliance on crude may be a bit reduced but going for $75 might be a bit too low,” Chinda said.

The Chairman, the House Committee on Finance, Abiodun Faleke, justified the recommendation, stating that the production is close to 2 million barrels and is getting better. Faleke emphasized that putting a lower projection would indirectly tell operators not to work hard.

Faleke said, “As of today, the production is close to 2m barrels. It is getting better. Operators of NUPRC gave us the details. If you put a lower projection, you are indirectly telling the operators not to work hard. Let us push them to work harder and get more funding for our country.”

“There was a time during the era of Goodluck Jonathan when we were around 2.5mbpd. Mind you, this 2.06 projection includes all the concentrates. It is not just crude oil alone,” Faleke added.

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The House also adopted inflation rate projections of 15.75, 14.21, and 10.04 percent for 2025, 2026, and 2017, respectively. The 2025 Federal Government of Nigeria budget proposed spending of N47.9 trillion, with new borrowings standing at N9.22 trillion.

Capital expenditure is projected at N16.48 trillion with statutory transfers standing at N4.26 trillion and sinking funds projected at N430.27 billion.

The Deputy Speaker, Benjamin Kalu, presided over the session, which saw the House dissolve into the Committee of Supply to consider the report of the Committees on Finance and National Planning and Economic Development.

The MTEF/FSP is a critical document that outlines the government’s economic objectives, fiscal policies, and budget priorities. It provides a framework for the government’s budget preparation and ensures that the budget is aligned with the country’s economic objectives.

The document also provides an overview of the government’s revenue and expenditure projections for the next three years. It outlines the government’s fiscal policies, including its debt management strategy, and provides an analysis of the potential risks and challenges associated with the implementation of the budget.

The approval of the MTEF/FSP by the House of Representatives is a significant step towards the preparation of the 2025 budget. The document provides a framework for the Federal Government’s fiscal policies and budget preparation for the next three years.

In his contribution, a lawmaker from Nasarawa State, Gbefwi Gaza, expressed concerns about the proposed exchange rate of N1,400 to the dollar in the three years under consideration. Gaza noted that the volatility of the naira against the dollar could have significant implications for the country’s economy.

Gaza said, “In the past few years, we have seen the volatility in our currency. In this country, virtually everything we do is pegged to the dollar. If we don’t have a very good proposed rate, what that means is that we have to increase our borrowing for any deficit.”

“What do we have on the ground to make the naira stronger and make the dollar weaker? Yes, we have the Dangote Refinery but we are in a phase of energy transition. We are going to the era of using more batteries and fewer fossil fuels; yet, fossil remains our main source of income,” Gaza added.

The House also adopted the recommendation of the Committee on Finance, which suggested that the Federal Government should intensify efforts to improve revenue generation from non-oil sources.

The Committee Chairman, Abiodun Faleke, noted that the country’s over-reliance on oil revenue was a major challenge to its economic development. Faleke emphasized the need for the government to diversify its revenue base and explore other sources of income.

Faleke said, “We need to intensify efforts to improve revenue generation from non-oil sources. Our over-reliance on oil revenue is a major challenge to our economic development. We need to diversify our revenue base and explore other sources of income.”

The approval of the MTEF/FSP by the House of Representatives is a significant step towards the preparation of the 2025 budget. The document provides a framework for the Federal Government’s fiscal policies and budget preparation for the next three years.

The House also commended the Federal Government for its efforts to improve the country’s economy. The lawmakers noted that the government’s policies had led to an increase in the country’s revenue and a reduction in its debt profile.

The House also directed the Committees on Finance, and Petroleum (Upstream and Downstream) to investigate allegations of financial irregularities by the NNPC. The probe follows reports from the Revenue Mobilization, Allocation, and Fiscal Responsibility Commission, which claim that the NNPC withheld N8.48 trillion in purported subsidies for petrol.