Nigeria’s federal government is owed a monumental N5.2trillion debt, according to data aggregated from over 5,000 debtors across ten Ministries, Departments and Agencies (MDAs).
Finance minister, Zainab Ahmed disclosed this in Abuja on Monday at the official launch of the Project Lighthouse Debt Analytics & Reporting Platform, which would help government track debt more transparently.
A review of perceived significant leakages in Government led the finance ministry to issue a directive on September 26, 2019, to all government agencies to aggregate all Government debts across MDAs, in order to have a single window on the credit profile of Government.
“Sequel to the issuance of the Finance Circular, the Ministry through the consolidation efforts of the project, has been able to aggregate monumental debts of approximately N5.2 trillion,” Ahmed stated.
She said that working in collaboration with the Office of the Accountant General of the Federation (OAGF), government has been able to recover some N53.5 billion within the last 12-18 months, through the Government Integrated Financial Management Information System (GIFMIS).
However, to consolidate on the current effort, a Debt Recovery Application has been built to be monitored by the new Debt Recovery Unit.
The Debt Recovery Unit will capitalize on the effort made by the project consultants to provide the government with up-to-date records into its credit status by harmonising debt records across all MDAs within the country. It will also give debtors access to a platform to view and offset debt in a seamless and secured manner as well as strengthen the institutional framework for enforcement and management of the Federal Debt Recovery plan.
Consequently, a fully functional website has been developed to effectively manage public perception around the Government debt recovery efforts and revenue improvement strategies.
As revenues shrink, the government has taken major steps to improve its fiscal position. One of such steps is the implementation of quite a number of portfolio initiatives under the Strategic Revenue Growth Initiatives (SRGI).
Despite a technology and data-centric world, the federal government has not had a culture of using data and information to guide the formulation, implementation and impact assessment of its initiatives and policies or even in carrying out other responsibilities.
She said this methodology presents a number of challenges, including that policies are not usually empirically based, government is not able to effectively track the implementation and impact of these policies, initiatives, programmes and mandate.
Also, there is lack of data to help guide the revision or optimization of these policies.
Read also: Nigeria’s biggest banks reduce 2021 bad loans on debt review
Ahmed said that in response to those challenges, the Finance ministry initiated “Project Lighthouse”.
She said that in July 2017 during the first Phase of Project Lighthouse, data was mined from multiple sources to support the implementation of the Voluntary Assets and Income Declaration Scheme (VAIDS).
The data included tax records from tax authorities, company ownership and directors from Corporate Affairs Commission (CAC), land records from land registries, Company directors’ information from NAICOM, AMCON, Non-structured data from online sources, Contractor payment records from GIFMIS, Remita, etc.
“All these data helped us to identify and better profile individual and corporate taxpayers. It also helped to identify tax defaulters and potential beneficiaries of VAIDS.
“This exercise raised awareness about VAIDS, increased the level of responses, helped us to know more about taxpayers, their assets and income sources that were hitherto unknown to government and tax authorities.”
The minister clarified that the usefulness of this platform for the government revenue generation effort which will be dependent on utmost cooperation and commitment in providing quality and relevant debt-related information to populate the platform.
She urged all Federal Government Owned Enterprises (FGOEs) and MDAs to update their list of debtors on a month-on-month basis against the Project Lighthouse debt recovery portfolio.
She said the process would be challenging, but the structures already put in place will in no distant time revolutionize fiscal policy in the country and anchor a robust economic growth.
“It is my firm belief that together we can dramatically change our revenue story by fully and innovatively exploiting the great power of Big Data Analytics and related technologies.”
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