•Query N10bn withdrawal for registration of NIPOST subsidiaries
From Ndubuisi Orji, Abuja
House of Representatives has announced readiness to probe the shortfalls in oil revenue following the Budget Office’s estimate of over N2.7 trillion revenue loss in 2024.
Chairman, House Committee on Finance, James Faleke, who disclosed this yesterday, said the shortfalls in government revenue had resulted in a deficit budget over the years. He explained that this has led to the government resorting to both domestic and foreign borrowing to implement its budgets.
The committee also raised eyebrows over the withdrawal of N10 billion from the coffers of the Nigerian Postal Service (NIPOST) for the registration of two subsidiary companies with individuals as shareholders.
The lawmaker, who spoke at an interactive session between the Committee and Ministries, Departments, Agencies and other stakeholders in government finances on the 2024-2026 Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP), said an increase in government revenue was the surest way out of the country’s economic challenges.
He said: “Our revenues have been reducing over the years due to decreases in oil revenues, which used to be our major earner. The Committee has vowed to get to the bottom of the shortfalls. The NNPC, our oil asset managers, cite oil theft as the main cause; however, how are the marginal field operators performing vis a vis the various oil fields potentials?
“How much deductions at source from oil productions are occurring due to the NNPC’s signed agreements over the years that are now impacting on our revenues? Even in the light of these revenue shortfalls, the Federal Government is still losing revenue from various waivers and exemptions granted various organisations.
“In 2024, the Budget Office has estimated a loss in revenue of over N2.7 trillion. Is the government getting the alternative benefits of these revenue losses? Is the public getting value for money for these revenues foregone, or is it just beneficial to a small set of well-connected people?
“Continuous borrowing due to these budget deficits has ballooned our debt servicing payments to the sad situation, where last year we spent over 95 percent of our revenues on debt servicing.”
While stating that the parliament would ensure the government gets value for its money in all agreements, he said the committee would not accept laxity on the part of the MDAs saddled with the responsibility of negotiating on behalf of the government.
“The Committee has observed various factors that have caused shortfalls in expected revenues, as well as charges to the government revenues from commitments by agencies of government. The Committee will not accept such laxity on the part of the MDAs in not negotiating the best for the Country. The $11 billion P&I D fiasco is still fresh in our minds, where the whole country was almost held hostage to a fraudulent agreement.
“Another agreement signed on behalf of the government by the NBET and Azura Power has committed payments of over $30m per month. This agreement is dollar denominated and applicable even now in times of acute foreign exchange shortages,” he said.
While grilling the Ministry of Finance Incorporated (MOFI), Faleke noted that documents before the Committee indicated that two NIPOST subsidiaries – NIPOST Property Company Ltd, and NIPOST Logistics were registered with individuals as shareholders.
“Is NIPOST part of your asset? I have a document before me concerning the registration of NIPOST Property Development Company Ltd. I saw that the shareholders of these companies are individuals. I also have NIPOST Logistics also registered in personal names. I want to know from you; did you give the Corporate Affairs Commission’s permission to register Nigerian assets in personal names? Some of them were working as civil servants and some of them have retired.
“Are you also aware that N10 billion was approved and withdrawn to be used for the set up of these entities and that the same N10 billion came in and also went out in the name of NIPOST from an account opened as NIPOST Property; Are you aware of that?” he queried.
The Chief Executive Officer of the MOFI, Armstrong Takang, said the Bureau of Public Enterprises (BPE) was in a better position to answer in respect to the N10 billion withdrawal for registration of the companies.
“I will refer that question to the Bureau of Public Enterprise (BPE) because BPE supervised the process for the unbundling of NIPOST to those two entities- the Logistics and Property Development Company.”
The MOFI CEO, while responding to the question on the use of individual names for the registration of the NIPOST subsidiaries, said: “This was recently brought to my attention and we are on it. We have sent a letter to the CAC through the Federal Ministry of Finance stating that they should not register any shareholder in a government entity other than the MOFI. That is the only way in the eyes of the law that the government can claim such property.”