SO WHO STOLE NIGERIA’S TRILLIONS?

February 6, 2015by Tope Fasua0

The debate around Professor Charles Soludo’s many bombshells is yet to end. In fact, it gets more intriguing by the day. Initially, it was about the general mismanagement of the economy and the ‘refusal’ of the two main political parties angling for the leadership of this country to put financing at the forefront of their campaigns, choosing instead to make promises which they may not be able to finance. Soludo later stepped up the heat by alleging in a rejoinder to the Finance Minister’s rejoinder, that gross embezzlement and mismanagement, never before seen in the history of humanity, had happened under her watch in the last four years. Precisely to the tune of N30trillion. The response of the APC to the excoriation by Soludo, was however more measured.

Let us stay on this FANTASTIC N30trillion figure. Fantastic because it sounds to huge to be true. But we know, and it is obvious on the streets, that a great heist happened before our very eyes in the last few years. It is evident in the huge mansions, and shopping malls, built with stolen public money, many times owned by civil servants and politicians. Sometimes, very ‘smart’ businessmen get their own too. The top bankers are never far away from where the booty is being shared. It is obvious in the apparent huge disparity in income and standards of living in Nigeria. Most of us are still dirt poor and food hungry. We live in despicable environments, existing side by side with the plushest of mansions. It is to my amazement and agony, that all of a sudden, the government is declaring on the people, a season of hunger. Yet the mis-managers of the economy are still very much around us, hoping to consolidate their position as our slavemasters, afterall they managed to take as much as possible for them and their children while the looting lasted. Yes, I know it still goes on.

Anyway, while I was still ruminating over the Soludo Bombshell, I ran into an article in the newspapers wherein the Nigerian Federal Inland Revenue Service (FIRS), declared that it made tax collections worth N4.69Trillion in 2014. I did a double take, because the entire national budget for that year, was itself N4.695Trillion. But I noted that much of what the FIRS collects will also be shared to some states. Yet, the figures did not jive.

According to the Finance Minister, while reading the budget last year, the total estimated revenue was projected at N10trillion, out of which N3.73trillion would be for the Federal Government, the rest being for the States and Local Governments. See http://www.premiumtimesng.com/…/161390-jonathan-signs…. This means that the Federal Government ran a deficit of about N900billion in spite of our good fortunes that year.

In spite of some of these explanations, there seem to have ALWAYS been a high degree of non-disclosure in Nigeria’s public finance. Maybe this is what Soludo is hinting at.

The cash cows for Nigeria are Federal Inland Revenue Service, Nigerian Customs Service, Nigerian Ports Authority, Nigerian Maritime Administration and Safety Agency, Federal Airports Authority of Nigeria, Nigerian Civil Aviation Authority, Nigerian National Petroleum Company (NNPC) among others.

The Customs Service projected a target of N2Trillion in 2014 but achieved N977billion according to reports. See http://sunnewsonline.com/new/?p=99779. One area of revenue loss is the famous corruption in the Customs Service. There is no way Nigeria could have collected all that is due. Conservatively, and given the fact that the Customs of late has been making valiant efforts at reforming itself, we could assume that the Federal Treasury would be undercut by at least N200billion in lost revenue. If we add the famous waivers given by the Finance Ministry to big time importers (we remember the Coscharis case, the Redeemed Church luxury building materials case, and of course Dangote among many others), Nigeria could have lost at least N1trillion in Customs Duty.

The FIRS has also reformed over time, but Nigerians still do not conform with tax laws as we should. There are also many people whose stock in trade is the hijacking of Federal Government tax cheques for illegal clearance into personal account. We could assume that if the FIRS declares N4.69Trillion, leakages in and outside the system, plus tax evasion, could have cost Nigeria another N4Trillion.

I tried to research what Nigeria earned through NPA and the other agencies, but there was non-disclosure. The only available material online is an interview granted by the NPA Boss but he kept talking about Cargo throughput increase as a sign of their achievement. I felt it was a deliberate policy of theirs never to talk about the figures.

If FIRS could collect N4.69Trillion, what will our major cash cow – crude oil – have contributed in 2014? One could logically challenge the projections of the budget office that Nigeria’s total revenue was N10trillion. FIRS could not have contributed almost 50% of Nigeria’s earnings. If we consider the nation’s portion of crude oil sales, say a conservative 1million barrels a day (discounted), at a profit margin of say $70 per barrel, that is $70million or N10.5billion daily (if converted at a conservative N150 to the Dollar). This is N105billion in ten days, and N1Trillion in 100 days. If we had 300 working days in a year, that is N3trillion in income (profits), from the NNPC.

It thus looks like Nigeria could have realized close to N20Trillion in 2014. Internally generated revenues by almost all the agencies have been ignored and many agencies have been accused of non-declaration as the law prescribes. Apparently, Nigeria has become a fiefdom for its politicians and civil servants. There are too many ‘off-balance-sheet’ items that are not disclosed to the public. Too much gets taken out of the system, at state and federal levels, in the name of ‘service-wide’ votes and security votes. Certainly, Nigerians deserve more disclosure, not a blanket declaration of suffering upon them, in the name of Austerity Measure. The same people declaring this austerity, are sitting on the missing trillions, in many local and foreign accounts, and many huge properties and estates in Nigeria, many of them lying vacant. These people just can’t believe their ‘luck’. A great injustice has been wrought upon the land.

I conclude by drawing attention to what is called our Fiscal Productivity, which is the lowest in Africa. According to a big friend of mine, Professor N. N. Susungi (a former presidential candidate in Cameroun), Nigeria is an oddity. We can now conclude that the issue is not that Nigerians are not paying taxes – we may already be overtaxed – but that there is non-disclosure of our earnings and that most of the earnings are cornered by those closest to the treasury. Hear him:

“Forget about the GDP Growth Rate and Pay attention to Fiscal Productivity and Tax Revenues. These days when I hear about African countries with high economic growth rates, I yawn because those figures are so misleading. What is important is tax revenues generated by the government because that is the spending power of the country. The power of the South African Economy is that it generates over $90 billion in tax revenues a year. Nigeria is supposed to be the 2nd economic powerhouse in Africa, but it can only generate $23 billion in tax revenues even though it produces and exports 2.6 million barrels of crude oil per day while Angola generates up to $56 billion in tax revenues for producing around 2million barrels per day. Nigeria is not an economic giant. It is a large grape fruit which contains no juice. Cameroon’s GDP is $25 billion, but it only generates tax revenues of $5.2 billion while Equatorial Guinea generates $10.2 billion in tax revenues.”

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