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Oil theft has put economic diversification under serious threat—-Lawan

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Oil theft has put economic diversification under serious threat----Lawan

Ahmad Lawan

Senate President, Dr. Ahmad Lawan on Friday declared that the increasing oil theft in the country has put the government’s efforts at economic diversification under serious threat.

This is just as he said that the budget deficit estimated at N7 trillion and the grim prospect of its increase to about N11.30 trillion as presented in the 2023-2025 Medium Term Expenditure Framework/Fiscal Strategy Paper, MTEF/FSP could be reduced by stopping the theft while government also consider other options to source more revenues.

In his welcome address during the presentation of the 2023 budget by President Muhammadu Buhari to the joint session of National Assembly, Lawan further lamented that the nation’s “economy is still challenged by dearth of revenues.”

He said: “The main source of revenue to the Nigerian government is oil and gas. We always consider the diversification of the economy as crucial and its indeed crucial. The idea of deploying our revenues from the oil and gas to support the diversification into real sectors like agriculture, manufacturing, mining, etc is now under serious threat.

“The large scale and massive stealing of our oil, is concerning, as this reduces drastically the revenues available to the government.

“With conflicting figures, projections have put our losses from this malaise at between 700,000 to 900,000 barrels of crude oil per day, leading to about 29 to 35 per cent loss in oil revenue in the first quarter of 2022. This represents an estimated total fall from N1.1 trillion recorded in the last quarter of 2021 to N790 billion in the first quarter of this year.

“The situation has worsened. Recently, the loss of our oil has reached 1 million barrels per day. Translated into monetary terms, our loss is monumental. The figures show we are not able to meet the OPEC daily quota of 1.8million barrels per day.”

Oil theft has put economic diversification under serious threat----Lawan

The Senate President specifically identified oil thieves as “the worst enemies of our country”, adding that “the thieves have declared war on our country and our people.”

“I strongly feel that if we do not take the necessary measures to stop the thieves immediately, our economy will be devastated, as efforts to provide infrastructure and diversification of the economy would both be thwarted. It is time to take drastic and desperate measures against the thieves,” he warned.

According to him, “the situation becomes more unfortunate if we factor in the budget deficit estimated at N7 trillion and the grim prospect of its increase to about N11.30 trillion as presented in the 2023-2025 Medium Term Expenditure Framework/Fiscal Strategy Paper, MTEF/FSP.”

The Senate President stated that the deficit could be reduced by stopping the theft, adding that government could also consider other options to source more revenues.

He further stressed the need to review the waivers and concessions government has granted to the tune of N6trillion, arguing that “in a difficult time like this, some of the waivers may no longer be justified.”

Similarly, Lawan urged the government to consider taking off some of the major revenue generating agencies from direct funding by placing them on cost of collection of revenues, as we did for Federal Inland Revenue Service, FIRS and the Nigeria Customs Service, NCS.

He added that agencies like Nigeria Ports Authority, NPA; Nigeria Communications Commission, NCC; Nigeria Maritime Administration and Safety Agency, NIMASA, etc can be given encouraging cost of collections of revenues, urging the National Assembly Committees on Finance and the Federal Ministry of Finance, Budget and National Planning to jointly look into the matter immediately.

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