Nigeria’s economy is something of an enigma. It defied the trouncing of the naira in the foreign exchange market, lewd opulence of government officials amidst cash crunch, menace of COVID-19 and gross mismanagement by government and grew at a record 5.2 per cent in the second quarter of 2021. What baffles everyone is that Nigeria is probably the only economy in the globe that its managers navigate the current global turbulence purely in the dark. They lack accurate data to guide their decisions.
That is what the current grilling of heads of ministries, departments and agencies (MDAs) of the federal government by the finance committee of the House of Representatives over the 2022-2024 medium term expenditure framework has revealed.
Mele Kyari, group managing director of Nigerian National Petroleum Corporation (NNPC) appeared last week before the committee to defend his corporations budget. He repeatedly side-stepped questions on how many liters of petrol Nigeria consumes in a day.
The next day, the chief executive of Petroleum Products Pricing Regulatory Authority (PPPRA) appeared before the same committee and was confronted with the same question that Kyari parried earlier.
The PPPRA boss ineptly dodged that question. NNPC imports billions of liters of petrol monthly but does not know what is consumed in the economy. It could therefore be concluded that NNPC does not know how much it spends on petrol imports in a month. That puts a huge question mark on the amount NNPC deducts from oil export proceeds for petrol subsidy.
The problem with NNPC’s petrol consumption figures is that they are founded on incoherent lies.
Kyari has told the world that Nigeria consumes 60 million liters of petrol daily and that 42 million more is smuggled into the domain of Nigeria’s five impoverished neighbours daily. That puts daily imports at 102 million liters.
The same man recently announced that Dangote Refinery in Lagos would be producing 60 million liters of petrol daily and that the company would not only satisfy Nigeria’s petrol needs but would be exporting the huge surplus. That is a sharp contrast from the fairy tale about Nigeria consuming 102 million liters daily.
The international oil community is convinced that Nigeria consumes 38.2 million liters off petrol daily. The Department of Petroleum Resources (DPR), NNPC’s regulatory arm added its official seal to that figure in February, 2020.
Besides, everyone knows that Nigeria’s five impoverished neighbours consume less than 10 million liters of petrol daily and that they import about 95 per cent of that from Europe.
Ironically, Kyari’s decision to feign ignorance of Nigeria’s daily consumption figures on petrol might have been informed by what the house committee did to Hameed Ali, the embattled comptroller-general (CG) of Nigeria Customs Service (NCS).
Ali submitted an import duty revenue projection of N1.3 trillion for the whole of 2022 to the committee.
The committee rejected Ali’s figure and ordered NCS to look forward to something in the range of N2.5 trillion as import duties revenue for 2022.
The committee’s decision to confront rather than dodge corruption, might have informed Kyari’s refrain in petrol consumption figures.
The National Assembly is finally doing to Nigeria’s revenue collectors, what the federal government should have done some 30 years ago. No one in the federal government lifted a finger in protest against the lewd opulence of officers and men of the NCS despite the pittance the service drops annually into the federation account as import duty revenue.
NCS officials are richer than the federal government. Nigeria should be making more than N5 trillion annually from import duties. NCS merely chips in a maximum of N1.3 trillion, while its officials share anything from N4 trillion annually among themselves.
For a start, the house committee on finance should give the NCS a target of N4 trillion as import duties revenue for 2022. With the naira trading at N525 to the dollar at the parallel market, the Central Bank of Nigeria (CBN) would soon be compelled to move the official exchange rate of the naira closer to the parallel market rate which paints a clearer picture of the purchasing power of Nigeria’s embattled currency.
Such move would automatically hike the naira value of duties on all imports. NCS would chip in N1.5 trillion as import duty revenue when actually it has collected more than N5 trillion.
Nigeria is teetering on the brink of self-inflicted bankruptcy. The catastrophic outing of federal government revenue collectors is at the root of the brewing bankruptcy.
If the NCS is given an annual revenue target of N4 trillion and the job security of the CG is predicated on attainment of the revenue target, the CG would transfer the heat to his field commanders who would in turn squeeze smugglers in a bid to meet the target and retain their jobs.
The Federal Inland Revenue Service (FIRS), Nigeria’s primary tax collector is the worst culprit in the abysmal performance of federal revenue collectors.
The raging controversy between FIRS and MultiChoice Nigeria, (MCN), the South African firm with monopolistic control of Nigeria’s bustling pay television market, is a sad reminder of a tax collector that is either too lazy or too corrupt to perform its statutory functions.
FIRS lame excuse for the N1.8 trillion tax fraud is that MCN was not responding to its enquiries about data. Only a corrupt and incompetent tax collector allows a criminal tax evader to ignore its demand for data.
The only explanation for such act of cowardice is that someone would have been bribed to ignore the tax fraud.
Last week the tax tribunal ordered MCN to pay 50 per cent of the N1.8 trillion it allegedly owes FIRS before the commencement of hearing on the cataclysmic tax fraud suit.
If it is eventually proved that previous chairmen of FIRS ignored MCN’s massive tax fraud, they should all be arrested and made to stand trial for the act of omission or commission.
Conversely, Mohammed Nami, the sitting chairman of FIRS should be adequately compensated for unveiling the phenomenal tax fraud. That is the only way to encourage transparency and diligence in the crucial venture of revenue collection at a time when Nigeria is on the brink of bankruptcy.
FIRS and the NCS can salvage Nigeria’s sinking financial ship. The federal government should fix 15 per cent of gross domestic products (GDP) as annual tax revenue for FIRS. The tax collector should be given two years to attain that target, failure of which its directors should lose their seats.
