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FIRS to the Rescue as Subsidy Gulps NNPC’s Revenue

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With a major chunk of the Nigerian National Petroleum Company Limited’s (NNPC) monthly revenue now being channeled to the payment of fuel subsidy, the Federation Account Allocation Committee (FAAC) now relies heavily on the revenue from the Federal Inland Revenue Service (FIRS) for its monthly sharing to the three tiers of government.

The 2021 financial records of the FIRS’ contributions to FAAC showed that in the year under review, the federal revenue collecting agency’s contribution was a total of 59.45 per cent, as out of the total of N8.912 trillion to the three tiers of government last year, N5.298 trillion was contributed by the federal revenue collecting agency.

The trend has continued in the first five months of 2022 as the NNPC’s contribution is still weighed down by the fuel subsidy burden.

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This emerged just as Nigeria again lost a whopping $650.7 million to crude oil losses resulting from declaration of force majeure, equipment failures and host communities’ disturbances between the April and May production cycle.

The World Bank had estimated that fuel subsidy payment in the country may rise to N5 trillion this year. Last week, President Muhammadu Buhari shut down calls for the removal of petrol subsidy, querying why the West should be demanding that Nigeria ends subsidy payments, while they continue to support their citizens with same to ameliorate the current economic hardship. In May, the NNPC was unable to carry out its statutory obligations to the federation, recording a N704 billion deficit for the year thus far. In its monthly presentation to FAAC for May, the national oil company had disclosed that it deducted another N327.07 billion as shortfall in the month under review. With a projected N1.473 trillion payments to the federation for the entire year and a monthly remittance of N122.767 billion, the implication was that the federal, state and local governments may continue to have cash shortages for a while since the payments constitute a major revenue source. In January, February and March 2022, petrol subsidy gulped 210.38 billion, N219.78 billion, and N245.77 billion, respectively while in April, the country spent N271 billion. These deductions were expected to continue throughout the year.

However, a breakdown of the FIRS monthly contribution to FAAC for 2021 showed that in January, it contributed 65.71 per cent (N388.54billion) to FAAC; in February (60.57%) – N361.26 billion; March (60.01%) – N501.32 billion; April (59.74%) – N403.70 billion; May (59.66%) – N359.77 billion; June (65%) – N664.30 billion and July (52.03%) – N397.95 billion.

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Other months included August (55.46%) – N403.85 billion; September (58.8%) – N516.57 billion; October (57.13%) – N333.82 billion; November (58.17%) – N496.19 billion and December (60.43%) – N470.90 billion.

The report also showed that in the past three years, the FIRS had been making steady progress in terms of revenue collections as it garnered N5.262 trillion in 2019; N4.952 trillion in 2020 (obviously due to COVID-19) and N6.405 trillion in 2021. It was glaring that the FIRS has been gradually making progress despite the impact of Covid-19, the instability in the oil and gas sector, insecurity in the country and economic downturn.

Findings also revealed that out of the total expenditure incurred by the FIRS during the year 2021, the payment of staff salaries, allowances and other staff-related costs accounted for over 63.6 per cent.

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Other key recurrent activities of the Service took 19.2 per cent of the funds, while capital expenditure accounted for only 4.8 per cent of the total fund utilisation for the period under review.

Interestingly, out of the meagre amount received by the apex revenue agency, 12.47 per cent of the total amount received as cost of collection (CoC) was transferred for servicing the capital project account and for the funding of its 13th-month salary to staff.

The 19.2 per cent which represented other key recurrent activities was spent on fueling and servicing over 272 generators, rent and the rent paid in respect of over 71 rented properties/office accommodation (particularly in Lagos).

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The remaining amount was used for capacity building of over 11,000 workers, fueling and maintaining over 1584 operational vehicles, and payment of Service Level Agreements for security, cleaning, and maintenance of properties and critical equipment in its over 367 operational offices nationwide.

Sadly, the agency could only spend 4.8 per cent of its revenue on capital projects. This could be largely attributed to the lack of adequate funding for the critical agency which accounts for well over 60 per cent of the monies distributed to the three tiers of government in the year 2021.

Analysts believed that in view of the above positive contributions, the agency needs more support from the government than it is currently getting. This, according to them was necessary because of the current peculiar revenue challenge the country was facing as well as in view of some of the global and local challenges being faced by the revenue authorities. These included capital projects started some years ago by FIRS are yet to be completed; some of the agency’s construction sites have been abandoned due to delays in honouring payments certificates; inadequate funding has also made it difficult for the FIRS to adequately build capacity and retrain its officers for modern tax administrative practices; as well as lack of ICT infrastructure necessary to identify and track digital transactions.

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Specifically, FIRS has lots of capital projects it had started (including its Corporate Headquarters which is rated one of the 10 top capital projects in Africa) and could not complete the project for lack of funds.

The provision of adequate funding would also be necessary because the FIRS would be able to deploy technology and block leakages; generate more revenue to fund the budgetary needs of both local and state governments as well as the federal government at the centre; complete its capital projects (particularly its HQ, prototype offices, training schools etc.) to save it from the current huge rents it pays to landlords for its office accommodations in some major cities; and above all provide more funds for the country as against the current resort to constant borrowing by the government at all levels is unsustainable.

Furthermore, analysts also advised governments at all levels to invest wisely the little that the apex revenue agency currently generates in critical infrastructure, social amenities, safety and security of the citizens.

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Headlines

NNPC Foundation Trains Over 3,000 Southwest Farmers in Climate-Smart Agriculture

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In a bid to promote food security and sustainable agricultural practices, the NNPC Foundation has successfully trained more than 3,000 farmers in the South-West geopolitical zone on climate-smart and modern farming techniques.

The training, which concluded on Friday in Ikorodu, Lagos, marked the end of the Southwest phase of the foundation’s pilot programme aimed at empowering local farmers and boosting agro-productivity.

Speaking at the closing ceremony, Managing Director of the NNPC Foundation, Mrs. Emmanuella Arukwe, described the initiative as a milestone in the lives of thousands of farmers.

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“Today marks the formal conclusion of the first phase of a national journey that speaks to resilience, food security, and economic empowerment,” Arukwe said.
“What began as a bold decision to support small holder farmers has translated into tangible action across three geopolitical zones (South-East, South-South, and South-West) in Southern Nigeria.”

She disclosed that a total of 3,860 vulnerable farmers across 10 locations in the three regions were trained in sustainable farming practices that improve productivity and market access.

“This achievement is not just a number, but a milestone in the lives of real people and real communities. We were able to strengthen farmers’ capacity to adapt to climate change,” she added.
“Through the training, we were able to improve access to markets, promote inclusive agriculture and especially gender representation. We also trained them on enhancing food production through sustainable techniques.”

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Arukwe noted that the programme would now move to the North-West, North-Central, and North-East zones as part of its next phase, saying the foundation is committed to supporting livelihoods nationwide.

“This is only Phase One. We will now turn our focus to the North-West, North-Central, and North-East zones. What we have achieved in the South will inform and strengthen our next steps,” she said.
“The NNPC Foundation will continue this mission, to support livelihoods, build resilience, and empower the hands that feed our families and beyond.
We have decided that most times you get a lot of requests from people asking us to give them palliatives and all kinds of things to help them.
But we think it is much better to teach people to fish than just give them fish so they can continue,” Arukwe explained.

Chairman of Ikorodu Local Government, Mr. Wasiu Adesina, while commending the initiative, urged the beneficiaries to apply the knowledge gained to boost productivity and profitability.

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“As we all know, agriculture is the bedrock of any nation. Without agriculture, there will not be a nation, because there will be no food to eat,” Adesina stated.
“It is the farmers that produce our food, and it is important that we train our farmers with new techniques in agriculture, and that is exactly what the NNPC Foundation is doing.

“To the farmers, you have to take advantage of this training and face the farming squarely. In some great countries like the United States and the United Kingdom, farmers are the most richest people in those countries.

“This is because they make a lot of money from farming. We need to inculcate that habit in Nigeria and develop ideas in farming. Even after my tenure, I am going back to farming, so, maybe I will ask the NNPC Foundation to train me so that I also join you to be a farmer.”

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He appealed to the foundation to provide further empowerment for the trained farmers to help them kickstart their agricultural ventures.

“If the farmers have land for farming, I believe the foundation will provide financial aid to keep their farms running,” Adesina added.

Also speaking at the event, the Lagos State Commissioner for Agriculture and Food Systems, Ms. Abisola Olusanya, represented by the Director of Fisheries, Mrs. Osunkoya Daisi, lauded the Foundation’s efforts in bolstering the state’s food security.

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“On behalf of the Lagos State Government, we would like to express our sincere appreciation to NNPC Foundation for training our farmers and for training all the farmers all over the country,” she said.
“Definitely, the training will help improve food production. We can see the impact of climate change effects in agriculture. I am sure farmers have been equipped with climate-smart agriculture techniques to improve production.”

The NNPC Foundation Ltd/Gte is the Corporate Social Responsibility (CSR) arm of the Nigerian National Petroleum Company (NNPC) Limited. It was incorporated in February 2023 to manage the company’s CSR initiatives and enhance Nigeria’s socio-economic development.

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Education

NUC grants ESUT full accreditation for Law, 7 other programmes

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The National Universities Commission, (NUC), has given full accreditation to the Enugu State University of Science and Technology (ESUT), for her Law programme.

According to the Public Relations Officer of ESUT, Mr Ikechukwu Ani, this is contained in a letter addressed to the institution’s Vice Chancellor, Prof. Aloysius Okolie, on Wednesday in Enugu by the NUC.

Ani said that in the letter, the Executive Secretary of NUC, Prof. Abdullahi Ribadu said the report was contained in the result of the October/November 2024 accreditation of academic programmes in Nigerian universities.

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Ani disclosed that other programmes in the institution accredited by the NUC include Master of Science in Business Management; Education Computer Science; Education Physics and Agricultural Engineering.

Other accredited programmes he said were Quantity Surveying; Urban and Regional Planning; and Applied Microbiology.

He said that the letter quoted Section 10 (1) of the Education National Minimum Standard and Establishment of Institutions, Act CAP E3, Laws of the Federation of Nigeria 2004 as empowering the NUC to lay down minimum academic standards for all academic programmes taught in Nigerian universities.

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He said the session also empowers the NUC to accredit such programmes.

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Crime

Court remands 2 over alleged attempted murder

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Court discharges man accused of burning father’s house in Abuja

An Ikeja Magistrates’ Court, Lagos, on Wednesday, remanded two persons, Olaitan Fasasi and Kehinde Tobiloba in a correctional facility over alleged attempted murder.

Fasasi, 40, and Tobiloba, 26, whose addresses were not provided, are being charged with conspiracy, attempted murder and membership of a secret society.

The Magistrate, Mr L.A Owolabi, did not take the plea of the defendants for want of jurisdiction.

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Owolabi directed the police to forward the case file to the Director of Public Prosecution for legal advice.

He thereafter adjourned the case until May 31 for mention.

The Prosecutor, Josephine Ikhayere, told the court that the defendants committed the offences at about 5.02p.m on Feb. 15, at Mushin, Lagos.

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She said that Fasasi, Tobiloba and others now at large, attempted to commit murder by shooting at a resident, Alfred Ademola.

“They armed themselves with a locally made gun. They belong to Eiye Confraternity, a group proscribed by law,”, she said.

Ikhayere said that the offences contravened Sections 230(1) and 411 of the Criminal Law of Lagos State, 2012.

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He said that the actions of the defendants also contravened Section 2(3)(a)(b)(c)(d) of the unlawful societies and Cultism Law of Lagos State Law.

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