Senate Passes MTEF/FSP, Set to Probe N8.4tn Withheld Subsidy Funds by NNPCL

The Nigerian Senate passes the MTEF/FSP and announces plans to investigate the N8.4 trillion subsidy funds withheld by NNPCL, aiming to ensure transparency and accountability.

The Senate has approved the Medium-Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) for the years 2024 to 2026, which will be implemented by the Federal Government.

This approval followed the presentation of a report by Senator Musa, Mohammed Sani (Niger East), who chairs the Joint Committees on Finance and National Planning & Economic Affairs.

Additionally, the Senate has directed its Committees on Finance and Petroleum, as well as Gas, to investigate claims regarding withheld funds by the Nigerian National Petroleum Corporation (NNPC). This includes allegations of NGN 8.48 trillion in petrol subsidies and $2 billion (equivalent to NGN 3.6 trillion) in unpaid taxes.

These allegations were brought to light by reports from the Nigeria Extractive Industries Transparency Initiative (NEITI) and the Revenue Mobilization, Allocation, and Fiscal Responsibility Commission.

This development follows the Office of the Auditor-General of the Federation’s confirmation that it has received all necessary documents to verify the N2.7 trillion fuel subsidy claim made by the Nigerian National Petroleum Company Limited against the government.

Furthermore, the Senate has approved an exchange rate projection of 1,400 USD for the years 2025 to 2027, with a provision for reassessment in early 2025, contingent upon the prevailing monetary and fiscal policies.

They also determined that any surplus beyond the official figure would be allocated for debt servicing.

During the discussion regarding the report presented by the Chairman of the Senate Committee on Appropriations, Senator Sani Musa (APC, Nigeria East), lawmakers expressed their call for a decrease in petrol prices, particularly in light of the recent operations of the Port Harcourt Refinery.

Senator Adeola Olamilekan, the Chairman of the Senate Committee on Appropriations, highlighted the Federal Government’s Compressed Natural Gas initiative as a crucial factor for implementing the exchange rate of N1400 to one dollar.

He stated, “As our refineries become operational, the demand for foreign exchange will diminish. With the CNG initiative, Nigerians will have an alternative; for instance, traveling from Benin to Lagos typically costs around 130 thousand Naira in fuel, whereas with CNG, the cost is reduced to approximately 48 thousand Naira. Additionally, the high recurrent-to-capital ratio needs to be addressed.”

Senator Yahaya Abdullahi of the Peoples Democratic Party, representing Kebbi North, emphasized the importance of supporting the manufacturing sector to meet the targets outlined in the Medium Term Expenditure Framework (MTEF).

In their resolutions, the Senate also approved inflation rate forecasts of 15.75%, 14.21%, and 10.04% for the years 2025, 2026, and 2027, respectively.

The recommendations indicate that the proposed Federal Government budget for Nigeria in 2025 is N47.9 trillion, with N34.82 trillion allocated for retention. New borrowings are projected at N9.22 trillion, encompassing both domestic and international loans.

Capital expenditure is estimated at N16.48 trillion, while statutory transfers are set at N4.26 trillion, and sinking funds are projected to be N430.27 billion.