By Henry Uche
Senator representing Niger East, and Chairman, Senate committee on Finance, Sani Musa in this interview monitored on Channels TV, spoke on why the president has delayed in the budget presentation, World Bank damning reports, NEITI harrowing report against NNPCL among other national issues.
2025 Budget is coming late already? What could be the delay?
You can see, since the inception of this administration, so many reforms and policies of government have been coming up, and we appreciate the fact that the economic team are doing their job the way it’s supposed to be done. We also as lawmakers, expect that we shall be given budgets timely so that we can start working on them. But we also, at the same time, would not want a situation whereby a document will just be presented to us without adequately going through because if you recall the beginning of this administration in 2023, there have been a lot of noise by Nigerians that we were rushing at policies. So, I believe Mr. President is now considering those voices that Nigerians made in making sure that the budget he is bringing is a budget that will rediscover the economy of Nigeria. So, I don’t think it’s late. I believe Mr. President is doing what he is supposed to do in other to checkmate whatever lapses we had in 2024 and correct them in 2025 budget. So, for me, it’s not too late. We are just in November. It doesn’t matter. I mean, we can scrutinize the budget and the President doesn’t have to sign the budget on first of January for us to do the correct and good job. We can take our time, scrutinize the budget very well, and then present it at the time we feel is okay. We have all seen it.
Nigeria has run a very awkward budget calendar and has never worked in synchrony. Some feel it would be awkward for us not to have an alignment with starting the year with a new budget. And that is the fear?
What we need to understand is that at the National Assembly, we do not have a fixed date, or, as you said, you just have one month to scrutinize the budget. There are so many committees in the National Assembly, and each committee looks at where it does as oversight, so the committee, at the level of committees, they will look at this proposal, because whatever the President is bringing to the National Assembly is a proposal. They will look at this budget proposal, and scrutinize it. I mean, you see, we, like the Finance Committee, we are over 58 members, and I can, as a matter of diligence, decide that, look, we divide ourselves into subcommittees to look at every part of that budget that is being proposed by the federal Ministry of Finance and agencies and make our recommendations, make our report to the appropriation committee. And for me, I believe that there will be enough time and we can do it between November and December. As I told you, it’s not necessary for us as legislators to impose when we know that is going to be difficult to say by December 31, we must.
Is there communication already from the executive, since you are in the same political party as the reason why the budget hasn’t come?
The communication is coming. Let me remind you, we have reviewed wages. We have reviewed a lot. There were a lot of policies; we have removed subsidy; we have made it possible, even the currency, the foreign exchange.
Have you reviewed the currency?
Of course
Are you sure? You mean there hasn’t been any spending at all under this government on subsidy?
No, no, no, no. When you are talking about spending under this government, I will tell you, there is no spending, because that was what we had yesterday. That is the reason why we call the NNPC Group Chief Executive to come and explain to Nigerians; he would explain to the committee first, what is happening. Is there subsidy, and what from all our takes? I mean from June 2023, after the pronouncement of Mr. President, the economic stability in terms of whether we spend a subsidy or not, has reduced drastically. And over time, has been removed completely. And today we have been able to remove subsidy out of our economy
(Curs in)… remove… our economy on paper!
Not on paper…You should also remember that the crude oil, even if it is domestic, or we are bringing it for any other place that are refined and brought into this country, crude oil are being sold at international market and it’s foreign. I mean, it’s dollar- based pricing. So for me, when we said we have removed subsidy and allow the market to determine its prices, it depends on willing buyer- willing seller policy. And for me, some of the issues that came up on why are we going to sell crude oil to Dangote refinery to stabilize the market, in order to reduce the pressure on foreign exchange. If we have the commodity in Nigeria, and we have somebody that will be willing to refine it based on that international price of the crude oil, we give him and he pays in naira and when he pays in naira, it doesn’t matter if I’m having a filling station in Kaduna and I’m going to Lagos to take fuel and bring to Kaduna. There is nobody subsidizing anything for me. So, when I get to Kaduna, I know how much it cost me to get this fuel from the refinery and how much it’s to get it down my filling station. So, big surprise. So, prices mean the timing by the seller. When subsidy is removed, there is no way prices will be stagnant. There was no way you can fix prices.
Some feel this government is not transparent enough and Nigerians are not being told the truth about how they subsidize!
I do not understand what you even get to know about subsidy. I don’t know if you can maybe explain to me your own understanding of the subsidy, my own understanding and what it is in reality, is that government is not going to put any money in supporting the supplier of PMS. We have done it with diesel in this country, we have done it with diesel, and people still buy diesel. So, if we are doing it with PMS, what is the problem?
Did you hear NNPC saying they are in debt?
They were in debt, that is what they said, Because the subsidy regime has gone and there is no way today NNPC will tell you that they are incurring any liability in terms of fuel importation or distribution of fuel in Nigeria.
What did the NNPC tell your committee about their remittances? Because there are those who have accused that company of opaqueness in the manner in which they have administered their books which, of course, we do know that it’s largely still owned by the Federal Government of Nigeria.
You know we as a committee, we went on the fact findings, and our fact findings is not far from some of the questions you have raised now. We looked at sales of crude oil in domestic refineries, while it is local, and what are the implications for the economy? And we believe that the explanation we have got is the best way to go, because it will reduce pressure. And you know, most of the discussion with it was centred on the fact that there was an approved item which takes care of the budget. I mean, it predicated what the budget would look like. And part of that is that there will be complete, removal of subsidy. And based on that, we were looking at the fact that, what if you sell in naira, are you going to sell it at the value of the foreign exchange, the value of the international market? I mean crude price at the international market, if that is what you do, I mean, we don’t have any problem with that. Our books will be correct and will be balanced. But in a situation where there will be just as you are talking about shortfalls, either going up or down, that means, if it goes up, we will have to ask questions, who is going to take care of the differences? In a way, that means there is subsidy. But the explanation we got is that there won’t be any of that because the price at which they will give, even based on the naira is going to be an international pricing. And then when you are talking about the remittances of NNPC, and that is one of the major reasons why we call for the fund balance, because we have been hearing about discrepancies here and discrepancies there, especially to do with maybe excess crude, stabilization fund cash calls. And we have wondered, I mean, when you see all these things, you will see that NNPC is at the center of it. And we feel it’s necessary for us to invite the group managing director to come and explain to us, and based on his explanation and what input we got from the chairman of the RMAFAC- Revenue Mobilization and Fiscal Allocation Commission, what he came up with was really, really something that committee took very seriously. And we asked the Minister of Finance, we asked the Chief Executive of NNPC, to give us explanations if there are underpayment. And just the question you had earlier asked that NNPC was talking about quite a lot of liabilities, but we also want to make sure that there is a complete forensic audit of NNPC books so that all the grey areas where the discrepancies we are all talking about, we bring them out and monies that are supposed to go to consolidated revenue funds clearly, we identify why they are not there. We also identify monies that are supposed to go to the Federation account, which, when I talk about Federation accounts, that is money that belongs to oil, including the sub national. So, we looked at them critically, and I believe that there is need for us to further look at the books of both the NNPC and then also reconcile with the office of the accountant General of the Federation.
There is a damning report on the NNPC by the World Bank. In September, oil traders were having some underlining problems with the NNPCL; that cold war went on and eventually NNPCL came to town to say they are owing oil traders 6 billion US dollars, did they tell you about that money and how would that be offset?
You should know that previous micro economic policies in this country were very discretionary and very unsustainable. And when you focus on thinking how far we have come today with the coming of this administration, his policies, I mean, the President, His Excellency, President Ahmed Bola Tinubu came in with some kind of bold decisive decisions, and those decisions today, over time, will transform to give Nigeria what we are supposed to have. And part of the problems we are having, these things you are talking about, are not issues that started in the last 18 months. These are things that have been there for many years. So, when you are trying to compare, what I will expect is that from now onward, how do we intend to take care of all those things that are there as the liabilities to the Federal Government?
And this brings us to the fact we said we have to do forensic auditing, and which, I believe the Federal Government has initiated its own to look at the books of NNPC. Look at the books of all of the accounting General’s office, all remittances that have been said to be done, which ones were done and which ones were not done. I think there is need for us to look at that significantly. You can see that the reforms from 2023 to date, I don’t understand what you said in books, but when you look at economic indices, you will see that what we have done now is to strengthen the economy and make it more stringent with those lapses.I’m still telling you that the policies we have come in with is to bring stability, macro economic stability in this country. And when you are talking about $6 billion, I cannot confirm to you right here until when that forensic auditing.
But NNPCL came out to say we are owing international oil traders so and so amount of money
Then we look at the cash calls. And this is the reason why I told you I was with NNPC and the economic team. From what we have had, we felt there is need for us to call for complete forensic auditing of those books. We will be able to determine, was there $6 million?
When you and your colleagues were sitting with them, do you feel and have a sense that there is some opaqueness in the operation of the NNPC because these are the fears of Nigerians?
You see, there was, because, as I told you, before the coming of the PIA, a lot of distortions in terms of even the operational activities of the NNPC. By then, before now, you can hardly understand, in fact, you cannot even determine what the CAPEX and OPEX of production is in this country. But today, with the kind of stringent policies that this government is coming in with, we are trying to see as much as possible that those lapses we have had in years before now are corrected. And for anybody to come up to saying oh this administration, there is $6 billion, I will tell you categorically that there was no $6 billion under this administration, and if there was any, then there will be within the regime of those days when the subsidy regime was.
World Bank report on the NNPCL released on the 17th of May 2024, says that the books of the NNPCL is opaque and they lack corporate governance. It gave a lot of examples of how the NNPCL has failed in delivering truth and effective corporate governance to Nigeria and short-changing the Nigerian state. Are you privy to that report?
Yes, I am privy to that report. I have read it, and I can tell you without any fear of contradiction, that Nigeria, before the passage of the PIA, we had been operating a system that we feel was more local than what is being practised internationally. The international best practices are what we have been able to put in the PIA and which we passed, just like what is happening in other climes. Before the PIA, there were no legislation, serious legislation to protect investors coming to invest in our oil industry. There are no legislation to protect the host communities and the rest of it. So in short, what I’m trying to say is that now that we did the PIA and NNPC was unbundled, and NNPC is supposed to start operating as an entity, which you are a shareholder, I am a shareholder, 230 million Nigerians, so more are all shareholders of NNPC limited; so, they are supposed to start operating like an entity with the kind of corporate governance resemblance like the ones we have Aramco and others. So, it will take a little while for us to be able to see if that legislation is really working on getting what we expect to get out of it. And you know, in every country, everywhere, legislation is born to be amended, to be repelled, amended. And I believe that with the committees the National Assembly have been put in. We check so many things, either in the downstream or up streams of the petroleum industries in Nigeria, will come up with reports. And by the time we gather all those reports, we will be able to look at the legislation itself, the PIA itself, where we feel is necessary to make some amends, we do them, and once we do that, that will create the kind of enabling environment where NNPCL will operate like an entity. And when you are talking about the reports we have received, and I have mentioned to you earlier, that government is working, the Federal Government has instituted through the Federal Ministry of Finance for forensic auditing.
It is already working. You don’t give timeline on issues like this, where it took so much of years of neglect.
Any policy that doesn’t have a window…
(cuts in) I want you to understand. I want you to understand me. If forensic auditing will be done and to be seen to have done, been done very well, you should know that IOCs will have to be also called. We have asked the minister and he has told us that the team has been working, and very soon, they will round off what they are doing and present the report to the government. And when they present report to the Federal Executive Council, and they have looked at the forensic report, the National Assembly, also, I’m sure will want to have that report and we look at it and do the needful. But for me, I don’t see a reason why. We will say, okay, go and start forensic auditing and we give them three months, and after giving them three months, we are not able to get what we want. We want to start this forensic auditing. It’s not from 2020 to 2023, we will have to study like from maybe 2010 to date because a lot have gone wrong.
It does look like we are running like a banana republic, the manner in which some people are treating Nigerians like we are fools, and Nigerians are not fools at all. There is a report, we understand, was presented to NEC, headed by one of the governors, but that report was not allowed to see the light of day about the running of the NNPCL and how our crude oil have been stolen … World Bank report is damming! This government promised us that refineries were going to be ready, the date keep changing every other month. Why are Nigerians being taken for granted?
I’m not here to defend NNPC, neither, I’m here as a spokesman of NNPCL or the government, but I can tell you I’m part of this government, and I would tell you that what you are saying or what you are reading cannot be justified. You cannot tell me just because World Bank gives a report, and that report is what it is.
OK. Don’t believe what the World Bank said let’s look at…
Allow me to talk! You said NNPC is this! NNPC is that! It is opaque! Nigerians have been taken for granted by who, by the government? That is your statement. But I’m trying to correct you. I said, if World Bank presents their reports, that is World Bank reports. We are here. We will look at those books. We will look at our own books. We will look at our own reports. What did I just mention to you? What stops us from calling for fact finding to know what is going on in terms of remittances for an NNPC, in terms of bringing in a policy towards the end of the year where you want to sell crude oil in naira. I told you all this is because we want to be sure that what we are doing is not going to reflect negatively on Nigerians and what this government is doing by virtue of the fact that we removed subsidy. Removing subsidy is the best thing that has happened to this country, let me tell you! Today, how much are we earning? if the money that Nigeria is making today, and the money that FAAC gives to the states, the state governments utilize those monies adequately.
Nigerians are taken for granted, Senator!
Nobody is taking Nigerians for granted!
Let me tell you how Nigerians are taken for granted. The World Bank said the books of NNPCL is opaque, evasive and deceptive! And what they are supposed to deposit into the federal coffers is not what they are depositing.
(Cuts in) how can you prove it is evasive and deceptive?
OK, if you don’t believe what World Bank says, this is what Nigeria Extractive Industry Transparency Initiative, NEITI has said, they said that in their report that the NNPC did not remit $2 billion in taxes to the Federal Government in 2022, NNPC denied it. NNPCL cannot also explain how it rounded up debt estimated at $7 billion in August, after declaring net profit of $3.
(Cuts in) when we call for fact, we invited all these agencies you mentioned. We invited NNPC. We invited Federal Minister of Finance. We invited the accountant General of the Federation. We invited NEITI, we invited Revenue Mobilization and Fiscal Allocation Commission. NEITI did not honour our invitation. And we say, I as a chairman of that committee, said, NEITI and the office of the accounting of the Federation must come and clear off some of these questions that we have. So, if NEITI has said that we call NNPC, and NNPC appeared before us, and NEITI that made those allegations are not there to substantiate them, how do you think we work? We cannot work until NEITI comes and gives us all those facts. The chairman of RMAFC came, he was there, he told us so many things. You are talking about not giving state governments enough money. Is it not the same governors that signed an agreement and engaging consultants to look at these books and then if money that were paid to the consultants are paid to the states, what does that mean? Is it not going to be more money for the states? What are we talking about? Let’s not be deceiving ourselves. If NNPC said we have remitted so amount of money, and you know that this money is not remitted, and you have facts, there is no better place for you to come than the National Assembly where we have called for fact finding to come and lay the books so that we can make the clarifications and on the basis of that, we said, we are not done enough. We are not done with NNPC. We are not done with the Minister of Finance, we are not done with all these agencies. We are still going to go further. There are a lot of discrepancies in terms of remittances either from the cash. What is going on in the cash calls, either for an LNG, either from excess crude, what is supposed to go to consolidated revenue and what is supposed to go to Federation funds, we will look at all that.
How do you explain to Nigerians what is happening under the renewed hope agenda?
You see the policies of this government is to see how we can move towards a market-based economy, whereby individuals, I mean, take control of the economy, not everything left for government to do. And from what I have seen, the policies that this government has come in with are policies that even the advanced economies around the world, when you look at how they operate their economies, is based on that. You go to UK, you are more or less a US citizen, your family are in United States. You are not even here. You know how it’s been operated. You sometimes even hear what government does? You hear about bad allocation every month to states? Do you hear that? You don’t! And that is the kind of economy that will propel whatever industrialization this country needs. Productivity has been having problems in this country. So, the policies this government is coming with are policies that I believe are not going to be so easy for us to think overnight, because we make changes, because a new administration comes in, everything will go very easy. You see, we tried to change policies that Central Bank of Nigeria has been operating before now. You can see this government has tried to exit Ways and Means which you should commend the government for doing that. We have exited Ways and Means and I will tell you today that these policies that you are finding very difficult, anywhere not only Nigeria but most sophisticated economy like United States or China will have to face the same thing. It is a phase. As well as going out of this space, we are going into another but what are the short term impacts, and what are those remedies that the government has put in place? There is so much poverty, that agreed, but there are also positive outcomes from what we are doing.
How would the average Nigeria breathe?
Let me tell you, before the coming of this administration, what was our budget and where does the budget go to; almost everything is debt servicing. We have been able to bring our debt ratio to GDP very low.
Source: Daily Sun
