…NNPCL faces probe over claim of N8trn indebtedness by FG
The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, on Monday, outlined how President Bola Ahmed Tinubu’s policies have curbed the accumulation of sudden wealth by influential individuals at the expense of vulnerable Nigerians.
Additionally, the President’s Economic Team addressed the Federal Government’s continued reliance on foreign loans despite surpassing annual revenue targets set by relevant agencies.
Meanwhile, the Nigerian National Petroleum Company Limited (NNPCL) is undergoing a forensic audit to verify its claim that the Federal Government owes it ₦8 trillion.
These developments emerged during an interactive session held by the National Assembly Joint Committees on Finance, National Planning, and Economic Affairs on the 2025–2027 Medium-Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP) in Abuja.
The session was attended by key officials, including Finance Minister Wale Edun, Budget and National Planning Minister Atiku Bagudu, Minister of State for Petroleum (Gas) Ekperikpe Ekpo, NNPCL Group CEO Mele Kyari, as well as the Comptroller Generals of Immigration and Customs, and representatives from the EFCC, among others.
Speaking during the session, Edun said the reforms policies of the present administration have began to yield dividends.
Edun said: “Just today, the National Bureau of Statistics, by the Statistician General, announced that GDP growth in the third quarter was 3.46% let’s say, for the sake of round numbers, 3.5%.
“That means that the GDP per capital is increasing, it’s improving. The economy is moving in the right direction.
“Inflation is too high and that is why interventions are being made particularly for the most vulnerable. Let me just summarize the change by saying that in Nigeria, for the first time in four decades, we have market prices of the petroleum products being determined by market forces because of the local refinery which is not only producing PMS but also diesel, or Jet A fuel. Well, it’s producing raw materials for the industries. It’s producing raw materials for agriculture
“In addition, we have market pricing of foreign exchange. And of course, the two are related.
“For the first time in 40 years, no Nigerian can wake up and think that his way to fortune and the quickest path he can take to getting rich is by getting an allocation of foreign exchange from the Central Bank of Nigeria (CBN).
“Likewise, no Nigerian can wake up and feel that his quickest path to riches is to look for a subsidized allocation from the Nigerian National Petroleum Corporation Limited (NNPCL) and make money.
“So, the incentives are for Nigerians now to add value in agriculture and in manufacturing and it is against that backdrop that today we have examined in details, the budget for 2025 and the medium-term expenditure framework.
“It is important to emphasize that even as we are having these successes, at the macro economic level, there is difficulty and we do need to be careful and we do need to save the cost. When we look at the figures, one of the biggest figures that was read out by the Senate Committee on Finance chairman, on debt servicing and that is because in June 2023, the key interest rate was 3.2 %. Today, it is 24.3%
“So when you have a shrinking of interest rates, and of course you have deficit financing, that is where care needs to be taken and that is where the fiscal tightness, the limited ability to spend at all levels to intervene in healthcare, social services, education, and so forth.
“So by the time you have market pricing of petroleum products, market pricing of foreign exchange, it will send all the right signals and then as well as we have to be financially disciplined to pay our debts, to pay our wages.
“You have the basis of an economy that can grow, a society that can develop, and people that can be proud of.”
Edun also disclosed that a forensic audit has been commissioned to determine whether the Federal Government is indebted to the NNPCL or whether the NNPCL is the one owing the Federal Account.
The revenue generating agencies in their separate presentations before the joint committees on 2024 budget performance and revenue projections for the proposed N49.7trillion 2025 budget, said they exceeded their revenue targets in the outgoing 2024 fiscal year.
First to make the submission was the Comptroller – General of Nigeria Customs Service (NCS), Bashir Adeniyi who said as at 30th of September this year, the agency had raked in N5.352trillion revenue which is above N5.09trillion targeted for the entire 2024 fiscal year.
He added that N6.3trillion is targetted as projected revenue for 2025, representing 10% increase of which would be the revenue target for 2026 and additional 10% increase for 2027 fiscal year.
The Group Chief Executive Officer (GCEO) of Nigerian National Petroleum Company Limited (NNPCL), Mr Mele Kyari, said the Company exceded the N12.3trillion revenue projected for 2024 by already raking in N13.1trillion.
“For the 2025 fiscal year, N23.7trillion is projected by NNPCL to be remitted into the federation account,”
he said.
The Chairman of Federal Inland Revenue Service (FIRS), Zacch Adedeji in his presentation, also informed the joint committees, that FIRS had surpassed its targeted revenues across the various tax components.
According to him, on Company Income Tax, N4trillion was targeted but N5.7trillion has been realised.
He said on Education Tax, N70billion was targeted, but a total of N1.5trillion has been realised.
“All in all, out of N19.4trillion targeted for 2024 fiscal year, N18.5trillion was realised as at the end of September, which clearly shows that the target , will be exceeded by the end of the year,” he said.
Following these disclosures by the agencies, members of the Senator Sani Musa-led joint committees, took them up on why the federal government is still seeking for foreign loans despite the high increase of internally generated revenues.
On his part, Chairman of the Federal Inland Revenue Service (FIRS), Dr Zaccheus Adedeji, explained why the Federal Government continues to borrow despite meeting and exceeding set revenue targets every fiscal year.
Specifically, Senator Adamu Aliero (PDP – Kebbi Central), who first asked the question said: “What is the Federal Government doing with excess revenues generated by the various agencies in view of its unending request for foreign loan approval ?”
Responding, the FIRS boss said loans being requested for by the executive were already part of the Appropriation Act.
Adedeji said: “The fact that we meet revenue targets, that does not mean we should not go and borrow and the reason is simple. The budget we have has both borrowing component and internally generated revenue component.
“So it is total package, our borrowing target is there in the budget as approved by the National Assembly.”
On his part, the Minister of Budget and Economic Planning, Senator Atiku Bagudu, said the federal lawmakers should not forget that the borrowing plans contained in the N35.5trillion 2024 budget, were primarily meant to fund the deficit which is N9.7trillion.
“Despite revenue targets surpassing revenue targets by some of the revenue generating agencies, government still needs to borrow for proper funding of the budget, particularly in the area of deficit and provision for the poorest and most vulnerable.
“We have a long term development agenda 2050 aiming at GDP per capital of $33,000,” he said.
Edun , also explained to the federal lawmakers that borrowing was still needed for proper funding of the budget despite excess revenues made by some agencies.
However, the Nigeria Immigration Service, faced a barrage of probing questions over lopsided Private Public Partnership arrangements on Passport production, which gave consulting firm 70% of proceeds and government 30%.
The Chairman of the Committee, Senator Sani Musa, directed the authorities of the Nigeria Immigration Service to present all the documents on the unacceptable PPP arrangement to the committee before the end of the week.
“The so called PPP arrangement must be reviewed or cancelled because Nigeria and Nigerians, are seriously being short changed,” he said.
The Director General of the Budget Office, Tanimu Yakubu, said the federal government expect a substantial reduction in the rate of inflation next year.
He said: “The reasons are obvious. We have been observing trends in the economy. We’re expecting a robust bumper harvest this year, and this normally accounts for 40% of our inflation.
“We are also reducing importation of PMS and diesel, and at the same time, for the first time, exporting some of these refined products on account of the emergence of the Dangote Refinery and as you know, the importation fuels inflation or escalates the exchange rate. The other source of inflation has been that of cost of drugs.
“The Federal Government has finalized an arrangement for massive unprecedented domestic production and importation of drugs that will be distributed through public healthcare centers all over the country in 2025.
“A question was asked as to the observed reduction in revenues raised by government-owned entities.
“Notably, this was as a result of the absence of NLNG and also NNPC with reduced contribution to the Federation as well as federal government revenues.
“We have heard it from the GCEO that because the revenue targets are very achievable, and also we expect that, in view of NLNG in terms of dividend payment, what was observed for last year will not be there in 2025.
“On interest rates, we need to remember that government has deregulated subsidies, not only on interest but also on foreign exchange. We believe that because the subsidies represent savings, what used to go into private pockets will now accrue to the public revenue stream.
“The federal government, the state government, the local government councils will have significantly more revenue than they ever have.
We expect that this would, going forward, moderate the amount of borrowing by the public sector and I think this will go a long way to stabilise the macroeconomics. But there is nothing that we will do as an administration to bring down the rate of interest.”
Earlier, Yakubu gave the highlights of the 2025-2027 MTEF/FSP, saying: “Key factors impacting the domestic medium-term economic outlook include the food and energy price effects of geopolitical tensions, challenging domestic macroeconomic and business environment in the impact of insecurity.
“These factors have compounded the existing vulnerabilities which are mostly structural. In reviewing the Federal Government 2024 Budget implementation, it is important to state that the whole projections are on track with the key non-oil revenue performing better than anticipated.
“This improved revenue performance can be attributed to the significant reform initiatives introduced by the current administration. As of August 31, 2024, the average aggregate revenue inflow was 12.74 trillion naira, approximately 73.8% of the pro-rated target of 17.25 trillion naira.
“Actual spending was 16.98 trillion, as against the pro-rated spending target of 23.37 trillion naira at the end of August. Of this amount, N7.41 trillion was for debt service, and N3.73 trillion for personnel costs including pensions.
“About 3.65 trillion naira has been released by August for capital project implementation. We should expect much more in the last quarter of the year so that we’ll be able to make a forward.
“The key parameters for 2025 to 2027 medium term fiscal framework. Considering the economic outlook and other factors outlined above, the following parameters have been set for the medium term. Oil price benchmark is assumed at $77.96 per barrel in the 2024 budget.
“And for the 2025 budget, and 2026 and 2027 budget, we assumed $75, $76.2 and $75.3 per parent respectively.
“Oil production, which was assumed to have averaged 1.78 million barrels per day in the current year, is assumed to experience an upswing to pull to 2.06 million barrels, 2.1 million barrels, and 2.35 million barrels in 2025 through 2027.
“The exchange rate which was N800 to the US dollar, in the current fiscal year, is assumed to have gone up to N1,400 to. A dollar through out the MTEF period.
“Inflation which was 21.4% in 2024 and is currently is in excess of 32% is assumed to experience substantial reduction to 15.75 next year to 14.21 in 2026 and 10.04 in 2027.
“Non-oil GDP, which was 233.89 trillion naira in 2024 is expected to improve to 301, 255.trillion Naira in 2025, and to 356.7 trillion Naira, and 409.3 trillion Naira in 2026 and 2027 respectively.
“Oil GDP, which was projected at 12.3 trillion naira in 2024, is expected to almost triple to 36.7 trillion naira and 40.7 trillion naira and 48.7 trillion naira in 2025, 2026 and 2027 respectively
“The GDP is expected to experience a growth of 3.8% this year the Minister of finance has mentioned that we have already attained a figure of 3.5.
“With that optimism it is assumed that the GDP will experience an uptrend of 4.6%, 4.4% and 5.5% during the projected MTEF-FSP period.
“Import levels are expected to double from N32 trillion to N66.8 trillion in 2025, to stabilize around 66 trillion naira over the remaining two years of the MTEF period.
“Based on the assumptions in the macro economic framework, the projected net amount accruing to the federation account in 2025 is 58.8 trillion naira.
“With the main pool being 51.61 trillion naira, VAT pool 619 trillion naira and the electronic money transfer levies N228.9 billion. Net oil and gas revenue is projected to be 40.42 trillion in 2025, about 69% of total migration are counted with 6 and 78% of the main pool. And these outcomes have not been found from what has for a very long time characterized internationally.
“There are many risks to the realization of the foreign and gas-fueling projections.
“In the current year, we have seen a non-performance in revenue, which is 35% below what was targeted up to August 10th.
“Corporate tax stands at N5.6 trillion, customs revenue at N3.2 trillion, special levies at N677 billion, NLNG dividend at N1.4 trillion, solid minerals at N31.9 billion, and Nigeria Police Trust fund levy at N5 billion.
“Based on statutory revenue sharing formula, the federal government is projected to receive 28.3 trillion from the Federation Account in 2025. States and local councils are expected to receive 17.3 trillion Naira and 13.14 trillion Naira respectively.
“The total revenue target 20.3 trillion Naira projected accrued to the federal government in 2025 consists of a main pool of the federation account of 27 trillion Naira, VAT pool, 1.0 trillion Naira inclusive of 1% share for the FCT, and the the electronic transfer levies of N34.3 billion Naira.
“The total revenue in 2025 is estimated at $34.8 trillion comprising of the following: oil revenues, 19.6 trillion naira; non-oil revenues, N15.2 trillion; Non-oil tax revenues was projects at 5.71 trillion, which was paid to 3.5 trillion naira in 2024.
“FGN shares of the minerals and minor revenues is estimated at 15.49 billion in 2025, from 4.56 billion in 2024. The pension revenue is projected as 3.5 trillion euro, up from 2.7 trillion euro. The projection for grant and donor funded projects is 711 million euros.”
