FG loses $4.42bn to under payments in oil and gas


• NEITI reveals how firms frustrate govt earnings


The Executive Secretary of the Nigeria Extractive Industries Transparency Initiative (NEITI) Mrs. Zainab Ahmed, has disclosed that audit reports between 1999 to 2008 has revealed huge losses in revenue to the government. Ahmed, yesterday, said such losses accruing from underpayments by the covered entities in the Oil and Gas industry was $4.42 billion.

In the same vein, chairman of the National Stakeholders Working Group (NSWG) of NEITI, Mr. Ledum Mitee while presenting the core NEITI audit report on solid minerals disclosed that the country lost N4.048 billion to under calculated royalty payments by companies far less from the current market value. “The prices used for the calculation of royalty payments are not the current market value thus leading to loss of huge revenue in the solid minerals sector. “For example, royalty for a tonnage of granite is still a pittance of N800 which is the price as at 2002. Today in 2012, the minimum market price is the price on royalty per ton is N2500.

The prices used for the calculation on all mineral deposits are long overdue for review,” he stated. Mrs. Ahmed has noted that the three cycles of audit reports have also revealed a total loss of $2.8 billion being the difference recorded through leakages between what companies reported that they paid and what government reported it received.

Regretting the challenges faced by NEITI which includes transiting from sustained implementation from transparency through accountability to impact on the lives of Nigerians, she also noted that the organization equally battles to cope with attaining stage to produce credible, independent reports with valid crucial information and data for the civil society to be able to hold government to account.

According to the report presented by the NEITI chairman, 78 companies were covered based on the materiality level with their activities covering construction, manufacturing, artisan, mining and buying centers. Details of the reports however, shows discrepancies and irregularities between the companies’ records and government receiving agencies records. While companies recorded N53,879, 374,

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