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Nigeria moves to block revenue leakages from IOCs, others

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Nigeria has sought assistance of the World Bank and the International Monetary Fund (IMF) on how to help track and block leakages in her tax revenue, especially from very large corporates such as the international oil companies (IOCs), Saturday Telegraph has learnt. Minister of Finance, Zainab Ahmed, disclosed this at the ongoing World Bank/ International Monetary Fund (IMF) meetings in Bali, Indonesia. Speaking shortly after the second meeting, the G24 meeting, where Kenya and Ecuador raised the list of member countries to 26, she said Nigeria’s greatest tax potential is from the IOCs that operate in the oil and gas sector.

She said: “So, for us in Nigeria, what we asked was how they can they help us to fashion out instruments that can help us pursue taxes, especially from very large corporates like IOCs.” Besides, the minister noted Africa accounts for 70 per cent of the illicit financial flows – majority of which comes from the extractive industries. Between $1.2 trillion and $1.4 trillion had left Africa in illicit financial flows between 1980 and 2009 roughly equal to Africa’s current gross domestic product (GDP), and surpassing by far the money it received from outside over the same period, according to Global Financial Integrity (GFI), which classifies “this movement as an illicit flow when the funds are illegally earned, transferred, and/or utilised.”

The minister said Nigeria asked the World Bank and IMF how the country can effect transfer pricing and how illicit financial flows can be stopped from extractive sector, adding that all these revenues are needed to enhance development of Nigeria Also, she said Nigeria met with investors and told them the Nigerian story, “making it clear to them that Nigeria is a good place to do business and that the returns you get from Nigeria is high, at about 14 per cent, as against about four per cent in the United States. Consequently, she said Nigeria was very confident that the $2.79 billion Eurobond about to be raised will successful. “In Nigeria, we have had a policy of diversifying the economy away from oil for a very long time and the Buhari administration is vigorously pursuing that.

“The evidence of that is seen in the last GDP report for the second quarter that was released recently where the non-oil sector grew by 2.05 per cent, compared with the oil sector that had a negative growth of four per cent. That is evidence that the nonoil sector is growing, service sector is growing and the manufacturing is growing,” she said. Ahmed also said the issue of disaster management was discussed at the meeting.

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