Nigerian economy defied COVID-19 to gross N14.38 Trn in 2020, 2021 __NEITI

Sopuruchi Onwuka

Despite the deleterious impact of the novel coronavirus disease popularly called COVID which shut down the global economy and neutralized oil prices, public enterprises and taxes mopped in significant N14.38 trillion in 2020 and 2021.

The revenue performance captured in the audit of the federations Fiscal Allocation and Statutory Disbursement (FASD) conducted by the Nigerian Extractive Industry Transparency Initiative (NEITI) indicated that actual revenue realization in the period surpassed the combined budgeted income of N13.720 trillion for the period.

Former President Muhammadu Buhari had in the 2021 budget presented an aggregate expenditure plan of N13.08 trillion which was to be supported by proposed aggregate revenue of N7.88 trillion. The disturbing 2021 budget had a deficit of about N5.20 trillion which was equivalent to approximately 3.64% of the nation’s gross domestic product (GDP).

The budget deficit which laid agenda for massive borrowing was also above the 3.0% threshold set by the Fiscal Responsibility Act due to the economic challenges attributable to COVID-19.

Earlier in its 2020 budget, the government of former President Buhari had also run an aggregate expenditure plan of N10.811 trillion against proposed income of N5.840 trillion; also running on a plan to borrow half of the proposed expenditure fund.

Then Oracle Today reports that the 2020 budget did not anticipate the full impact of COVID-19 on the global economy and on the price of petroleum commodities. And the 2021 budget also underplayed the speed of global economic recovery.

With petroleum commodities which form the main government’s revenue earner struggling with weak demand and low prices in the export, government had expected to finance budget deficits in the two years by new borrowings, privatization of public assets and utilization of previously secured loans.

According to report by NEITI, the Nigerian economy defied the impacts of COVID-19 as government revenue generating agencies remitted princely 14.38 trillion to the Federation Account in the period.

The revenue generating agencies include the Nigerian National Petroleum Company Limited (NNPCL), the Nigerian Upstream Regulatory Commission (NUPRC), the Federal Inland Revenue Service (FIRS), the Ministry of Mines and Steel Development (MMSD), and the Nigeria Customs Service (NCS).

A breakdown of the remittances showed that mineral revenue accounted for N6.40 trillion or about 44.5% of total remittances for the period, and non-mineral revenue, excluding VAT, accounted for N4.80 trillion or about 33.37% of total remittances.

The information and data are contained in the latest Fiscal Allocation and Statutory Disbursement (FASD) report published by the Nigeria Extractive Industries Transparency Initiative (NEITI) which covered the period 2020-2021.

Executive Secretary of NEITI, Dr. Orji Ogbonnaya Orji, while presenting the highlights of the report stated that the information and data contained in the NEITI latest FASD reports reviewed processes that characterized all transactions within the sector.

It looked at independent assessment of financial transactions in the areas of revenue receipts and payments and how the processes weighed on the scale of transparency and accountability in the oil and gas sector during the period under review.

Other areas that NEITI focused on, in this report, were projects executed, deployment to capital projects and recurrent expenditure and how these aligned with the core responsibilities of the agencies, the government and citizens expectations.

NEITI’s FASD Report examined total extractive industries revenue remitted to the Federation Account, tracked allocation and disbursement from the account to statutory recipients as well as utilization and application of the funds by beneficiaries between the years 2020 to 2021. 

The audit covered four federal revenue generating and 11 beneficiary agencies that are involved in the management of extractive industries funds. It also covered nine selected states: Akwa-Ibom; Bayelsa; Delta; Gombe; Imo; Kano; Nasarawa; Ondo and Rivers states.

The beneficiary agencies include: Tertiary Education Trust Fund (TETFund); Petroleum Technology Development Fund (PTDF); Niger Delta Development Commission (NDDC); Nigerian Content Development and Monitoring Board (NCDMB); Nigeria Midstream and Downstream Petroleum Resources Agency (NMDPRA), Petroleum Equalization Fund (PEF), Nigeria Midstream and Downstream Petroleum Resources Agency (NMDPRA).

Others are the Nigeria Sovereign Investment Authority (NSIA); Development of Natural Resources Fund (DNRF); Stabilization Fund; Ecological Fund; Excess Crude Account (ECA).

The report, which is the fourth in the audit cycle, revealed that overall remittances to the Federation Account for the period increased by about 14%.

The Auditor General of the Federation Mr. Shaakaa Chira, represented by the Director of Audits, Mr. Sundung Eldad James, stated that the FASD report is useful to the office of the Auditor General and it is also in fulfillment of the Agency’s mandate as enshrined in the Constitution of Nigeria.

He stated that the report will further assist his office when performing the Audit of the federation revenue, its collection, remittance, and disbursement process.