This extends to subsidy arrears that are still being deducted and the impact of subsidy removal on federation revenues, the bank noted. The Washington-based made this call in its Nigeria Development Update, December 2023 edition titled, ‘Turning The Corner (from reforms and renewed hope, to results).

This is the Minister of Finance and Coordinating Minister of Economy, Wale Edun, revealed that the government was ready to scrutinise the revenue flow from the NNPCL.

According to the World Bank, while revenue gains from the exchange rate reforms are visible, more clarity is needed on oil revenues, including the fiscal benefits from the PMS subsidy reforms.

It declared, “nominal oil revenue gains have been evident since June; these are mostly categorised as “exchange rate gains”, suggesting that they are due to the naira depreciation.

“Except for the exchange rate-related increases, however, there is a lack of transparency regarding oil revenues, especially the financial gains of the Nigeria National Petroleum Corporation from the subsidy removal, the subsidy arrears that are still being deducted, and the impact of this on Federation revenues. It is also unclear why retail petrol prices have not changed much since August, despite fluctuations in the exchange rate and global oil prices.”

The Bretton Woods institution further expanded that gains in net oil revenue of the federation were lower than what they should have been considering what the removal of fuel subsidy should have added to the accounts.

It stated that fuel subsidy cost the federation about N380bn a month, and once removed, the federation account should have recorded an increase in net oil revenues.

It said, “However, most of the gains in the oil revenues in H2 2023, as reported by OAGF, can be attributed to exchange rate gains. Without exchange rate gains, net oil revenue between January and August would have declined by 0.2 of a percentage point of full-year GDP yoy, all materialising in the July–August period.

“In August, additional revenue from 40 per cent profit of Production Sharing Contracts and the interim yearly dividend were reflected in the accounts.  However, these were not as high as what the gains from removing the gasoline subsidy should have been. Given that petrol pump prices have not changed in line with market fundamentals (notably exchange rate movements and global oil prices), there is a risk that the implicit fuel subsidy has reemerged, potentially keeping net oil revenues lower than expected.”

The institution further noted that the reform of fuel subsidy should help the NNPCL to settle its arrears and start paying fully for the Federation’s share of costs in joint venture operations, thereby allowing oil production to gradually increase over time.

Also speaking at the presentation of the report, the Coordinating Minister of the Economy, Edun noted that the removal of fuel subsidy saved the government’s finances.

He stated that while expectations that subsidy removal should boost the government’s revenue, it was faced with debt funding and a high fiscal deficit.

He said, “In terms of the government’s finances, you have rightly pointed out that following the removal of subsidy, there is an expectation that there would be fiscal dividends and it’s fair to say that without it, government finances will be in total disarray now.  However, there is debt funding, pressure on fiscal deficit, and on government finances, and borrowings which have been inherited.

Our levels of borrowing are being reduced and there is a plan to reduce that fiscal deficit over time. On the revenue side, the first source is oil, and I expect that there will be serious scrutiny on oil revenue and production and insistence on raising oil production and similarly that the revenues are brought into the federation account following the constitution. I think there will be added scrutiny, and I am sure NNPC is getting ready for that.”

Edun further declared that there would be a robust rollout of measures to raise tax revenue soon. He, however, highlighted that tax rates would not be increased but a lot would be done regarding efficiency, digitalisation, and improved collection.

He added that waivers and tax incentives would be scrutinised to revamp it and save leakages, particularly among ministries, departments and agencies.

The Federal Government has, however, threatened to sanction those involved in the illegality, including the Federal Inland Revenue Service, Nigeria National Petroleum Corporation Limited, Central Bank of Nigeria and the Nigeria Customs Service, among other MDAs.

Investigations showed that some agencies issued employment letters to jobseekers, which were not accredited by the Office of the Head of Civil Service of the Federation and the Federal Civil Service Commission, while others simply replaced retired or dead officials with friends and family members.

But the replacements were done without the approval of the OHCSF and the Federal Civil Service Commission.

some civil servants, who were engaged in employment racketeering, were caught in the Federal Ministry of Works.

It was also reported how the OHCSF uncovered over 1,500 civil servants with fake employment letters in a ministry.

Corroborating this, the Head of the Civil Service of the Federation, Dr Folasade Yemi-Esan, said her office had detected a total of 1,618 workers whose letters of employment were either fake or illegal in the Federal Civil Service.

This is despite the embargo placed on employment by the government.

In 2019, the Nigerian National Petroleum Corporation was reported to have employed many individuals without following the due recruitment process.

Many groups, including the Niger Delta Youth Consort of Nigeria, protested against the NNPC for excluding the region and southerners in the secret recruitment.

The National Coordinator of the NDYCN, Chuks Onuoha, described the practice as unacceptable, but the then NNPC spokesman, Kenny Obateru, denied the recruitment.

According to him, what the NNPC management did was to fill the vacancies with personnel who were already in the system and were qualified rather than recruiting fresh ones from outside the system.

But applicants, who got to the final stage of the screening process, accused the oil giant of substituting their names with favoured candidates.

“The NNPC replaced most of the EH positions under the guise of a hurriedly planned scheme codenamed Internal Open Resource where some people, who contracted third party staff members and did not meet the requisite experience and qualifications in the advertised EH vacancies, are being deployed through the backdoor in an unfortunate and disappointing bid to jettison the EH merit list,” the President, Transparency in Recruitment at Ministries, Departments and Agencies, Felix Sunday, had lamented then.

The current NNPC spokesman, Garba Deen Muhammad, asked one of our correspondents to send a message to him on WhatsApp three Fridays ago, but he had yet to respond to the message as of the time of filing this report.

Similarly, the Federal Inland Revenue Service was enmeshed in a recruitment scandal in 2021 after it emerged that it secretly engaged 2,000 workers, a development that put a strain on its budget.

The Nigerian Civil Service Union, which disclosed this in a petition to the FIRS Chairman, Muhammad Namu, in June 2021, also revealed that the agency was finding it difficult to pay salaries at some point after the secret engagement of the staff members within a period of 18 months.

It demanded an end to the re-engagement of retired directors and other categories of staff.

The media aide to the FIRS chairman, Tobi Wojuola, refused to respond to the allegations against the service when contacted.

Reacting to allegations of illegal recruitment, the Nigerian Customs Service spokesman, Timi Bomodi, insisted that there had been no backdoor recruitment in the service.

He said, “We advertise every recruitment in newspapers; there is no ministry and department of government in Nigeria that is as transparent in its recruitment process as the Nigeria Customs Service.

All the 774 local government areas are represented in our recruitment. Applicants are made to sit aptitude tests and are selected based on their competences. You don’t need to know anybody before you can be employed in the service.”

Also, the Central Bank of Nigeria was accused of recruiting 909 staff members within two years without advertising the vacancies. Although the Federal Character Commission investigated the allegation, nothing has been heard about the case.

The Group Chief Executive Officer, NNPC Ltd, Mele Kyari, disclosed this to journalists when he appeared at the 49th Session of the State House Ministerial Briefing organised by the Presidential Communications Team, at the Presidential Villa, Abuja.

A supply of 300,000 per day in 20 years brings the total supply to 2.1 trillion by the NNPC.

According to him, the corporation had succeeded in locking down the huge supply as part of the Federal Government’s means of guaranteeing sufficient petroleum products supply for Nigeria.

“We have secured the right to sell up to 300,000 barrels of crude oil to the Dangote refinery for the next 20 years. Not only that, by right, we also have access to 20 per cent production from that plant,” he said.

He alleged that stolen crude oil products were now stored in places of worship such as churches and mosques.

He also noted that various law enforcement agencies had arrested 122 persons involved in pipeline vandalism and oil theft from April to August of 2022.

This was as he justified the government’s recent move to hire private entities to safeguard the network of oil pipelines crisscrossing the country.

According to him, the NNPC operatives discovered that stolen petroleum products were stored in places of worship with the consent of the clergy, members and neighbours.

He claimed that in one instance, at least 295 illegal connections were spotted on a 200km stretch of pipeline.

“As you may be aware, because of the very unfortunate acts of vandals along our major pipelines from Atlas Cove all the way to Ibadan, and all others connecting all the 37 depots that we have across the country, none of them can take delivery of products today.

“The reason is very simple. For some of the lines, for instance, from Warri to Benin, we haven’t operated them for 15 years. Every molecule of product that we put gets lost. You remember the sad fire incident close to Sapele that killed so many people. We had to shut it down and as we speak, we have a high level of losses on our product pipeline.

“You remember Lagos, when a fire outbreak happened on one of our pipelines. We discovered that some of the pipelines were actually connected to individuals’ homes. And not only that, with all sensitivity to our religious beliefs, some of the pipelines and some of the products that we found were in churches and mosques,” Kyari said.

He explained that the spate of vandalism had prompted NNPC Limited to shut down its network of pipelines conveying petroleum products across theft-prone areas.

When we say we are losing 700,000 barrels of crude oil per day, we mean it. This is an opportunity lost. There is no company that will produce oil and then you lose 80 per cent of that and continue to produce the oil.”

The NNPC chief said the government’s response to oil theft had led to the arrest of 122 persons between April and August, 2022.