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Nigeria's leading finance and market intelligence news report.

Reps accuse MDAs of extra-budgetary spending

…as DPR blames Customs for petrol smuggling

The House of Representatives on Thursday said agencies of government embark on extra-budgetary spending contrary to the 1999 Constitution (as amended) and the Fiscal Responsibility Act.

The House also accused some agencies of under-reporting the actual revenue generated and threatened to remove capital and overhead costs from the 2022 budget of those that will fail to appear for interface with lawmakers on the 2022-2024 Medium-Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP).

Chairman of the House committee on finance, James Faleke who stated this in his address at the close of a-two week interaction with ministries departments and agencies (MDAs) on the 2022-2024 MTEF/FSP said agencies that are yet to appear before the committee will be re-invited to appear on resumption of the House of Representatives from recess.

Faleke said the exercise which is geared towards plugging financial leakages and instilling fiscal discipline called for urgent need for a meticulous budget process as it has been established that most agencies are in the habit of recycling projects without due consideration for need.

He said there was urgent need to establish the country’s actual daily fuel consumption as data from the relevant stakeholders in the downstream sector were found to be conflicting.

“Also, noteworthy is the fact that the current PMS under recovery payments constitute a major drain on the country’s scarce resources. With the signing of the PIA, it is expected that this would come to an end soon.

Agencies have leveraged on their establishment Acts to spend their IGR thereby denying the government the needed revenue. The committee established that some of these acts are self-serving and against national interest. The need to expeditiously amend such Act cannot, therefore, be overemphasized.

“The committee is also worried over the agencies in-flagrant disregard for extant laws particularly the Constitution of the Federal Republic of Nigeria 1999 (as amended) the revenue generating agencies have refused to remit revenues due to the Federal Government. The action as it were is putting a major strain on the resources which ordinarily should be available for government to pursue its development objectives”.

Meanwhile, the Department of Petroleum Resources (DPR) had told the committee that the Nigeria Customs Service (NCS) should be blamed for trans-border smuggling of petroleum products.

DPR head of downstream monitoring and regulations, Bashir Sadiq while addressing lawmakers said it was the responsibility of Customs to stop smuggling, and dismissed claims it had failed to give the Service a list of legal and illegal fuel stations on the border.

“It is true that Nigerian National Petroleum Corporation (NNPC) has a lot of concerns about the quantity of PMS (petrol) it is importing. The corporation believes that because of price disparity, some are being smuggled… that makes sense considering that our prices are lower than our neighbours.

“I am not sure that the information that the controller-general of the Nigerian Customs Service has is correct. I have the record here. I remember that when the issue of smuggling of petroleum products was brought up to the DPR, it was by the group managing director (GMD) of NNPC.

“Whenever we get any request from them, we approve. We have never given any licence to any filling station since the drill started. We did an analysis of supply to the border area in the country. It does not amount to three per cent of the daily consumption”.

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