The Nigerian Extractive Industries Transparency Initiative (NEITI) has issued a stark warning: oil and gas companies owe the Federal Government a staggering $6.1 billion in unpaid royalties, taxes, and other revenues. This alarming revelation throws a wrench into the government’s plans to finance the 2025 budget and underscores the urgent need for decisive action to recoup these critical funds.
“At a time when the country is mobilising resources to meet its budget expenditures, recovering these revenues by the relevant agencies will be a huge relief to the government,” stated Ogbonnaya Orji, NEITI Executive Secretary, during an interaction with the Senate Committee on Public Accounts.
While the oil and gas sector has witnessed some positive strides, such as a significant drop in crude oil theft, these gains are overshadowed by the massive debt owed to the nation. This unpaid revenue represents a significant drain on the Nigerian economy, hindering development and exacerbating existing budget deficits.
“The oil sector is yet to fulfil its potential despite achieving recent milestones,” Orji lamented.
Beyond the financial implications, the issue of unpaid revenues raises serious concerns about transparency and accountability within the oil and gas sector. It highlights the need for stricter enforcement of regulations and a more robust system for revenue collection and monitoring.
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The NEITI report also revealed a concerning decline in the sector’s contribution to Nigeria’s GDP, falling from 7.24% in 2021 to 5.48% in 2023. This downward trend underscores the urgent need for a comprehensive overhaul of the sector to enhance its contribution to national development.
“The abysmal performance of the solid minerals sector does not mirror the vast mineral deposits in Nigeria and the potential that the sector holds for the economy,” Orji lamented.
The Senate Committee on Public Accounts has pledged to investigate these findings through public hearings. “All companies with outstanding liabilities to the federal government must appear before the Committee during the proposed hearing,” declared Senator Aliyu Wadada, Chairman of the Committee.
This crisis demands immediate and decisive action. The government must implement robust measures to recover the outstanding $6.1 billion, strengthen revenue collection mechanisms, and enhance transparency and accountability within the oil and gas sector. Failing to do so will continue to undermine the Nigerian economy and hinder the nation’s progress.
