Timely intervention by the Federal Government through the Ministry of Finance to block sources of revenue leakage in the financial system has yielded a positive result.
The Ministry of Finance blocked the revenue leakages by streamlining the receipt of all payments for transparency, accountability and probity, especially revenues from Public-Private Partnership (PPP).
The result came with the government saving N2.4bn from various payment sources, which has been paid into a Special Concession Account (SCA) within few months of its operation.
Before now, funds generated from PPP/concession were neither accounted for nor the whereabouts of the funds known both to the government and the public.
Regrettably, reports of various probe panels set up by both the executive and legislative arms of government on the matter were not made public.
Recently, the Fiscal Responsibility Commission (FRC) disclosed in its report that 122 Federal Government agencies failed to remit N1.2 trillion to the Consolidated Revenue Fund (CRF). The Fiscal Responsibility Act mandates government agencies to remit into the CRF, their operating surplus after every fiscal year.
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However, Nigerians have witnessed a disturbing trend whereby almost all government enterprises fail to comply with this financial obligation and continue to mismanage public funds.
The unremitted fund, which translates to $3.1 billion, is 10 percent of the amended 2020 budget and can fund the combined budget for education, health, works and housing, which stands at N1.2 trillion. But that is not all. In December 2018, Ben Akabueze, director-general, Budget Office of the Federation, said government-owned enterprises owed about N10 trillion in unremitted operating surpluses as of August 2018.
He further revealed that despite investing over N40 trillion cumulatively in the various government enterprises, the returns to government in terms of dividends or surpluses at the end of each operating year was less than 1 percent.
Sadly too, the anti-corruption agencies that ought to promote accountability and enforce fiscal laws have also been found wanting.
According to a report by the audit firm, PriceWaterhouseCoopers (PwC), the cost of governance in Nigeria remains a cause for concern, as recurrent expenditure continues to grow annually and undermines the implementation of the more critical capital budget, which hovers between 40 and 58 percent each fiscal year.
The opening of the Special Concession Account (SCA), which is domiciled with the Central Bank of Nigeria (CBN), followed a presidential directive to ensure that all revenues from PPPs go into one dedicated Treasury Single Account (TSA). The purpose is to further ensure that proper data in terms of investment and revenues coming in from PPPs are properly accounted for and documented, unlike what obtained previously.
Zainab Ahmed, minister of finance, budget and national planning, last year issued a Finance Circular with reference number HMFBNP/OHMFBMP/CIRCULAR/SCA/2020 to the MDAs/Concessionaires to remit all monies accruing from PPP agreements (with the exception of proceeds from an asset sale and liquidation) into the Special Concession Account domiciled in the CBN but still under the TSA.
Earlier, the Office of the Accountant General of the Federation (OAGF) had on November 7, 2018, issued a Federal Treasury Circular referenced TRY A12 & B12/2018; OAGF/ CAD/026/V.11/324, to be opened with the CBN, a Special Concession Account (SCA).
However, the special account was an initiative of the Infrastructure Concession Regulatory Commission (ICRC), an agency of the government responsible for the development and implementation of the PPP framework for the provision of infrastructure services.
According to Chidi Izuwah, director-general, ICRC, “Presently, the revenue accruing to the government via concession and PPP arrangements is not known and this had led to abuse and leakages by Ministries Departments and Agencies (MDAs) and Concessionaires.”
He listed the benefits of the SCA to include, effective monitoring of revenue accruing to government from PPP projects, assisting the government in economic planning, national budgeting and redistribution of income/revenue allocation, supporting the Federal Government Economic Recovery and Growth Plan (ERGP) initiative on infrastructure provision, providing information to policy and decision-makers, among others.
So far, ICRC has certified projects worth over $15 billion. The projects were approved by the Federal Executive Council (FEC) and they include three Full Business Cases in respect of the Bonny Deep Water Port Project, the Nigerian Correctional Service (NCS) Shoe and Garment Factories Projects in Aba, and the Janguza Tannery Factory Project in Kano, the Port Harcourt Industrial Park Project and the Port Harcourt – Maiduguri Narrow Gauge with O&M phase as Concession. The combined investment value of these joint venture (JV) projects is $3.9 billion.
The Bonny Deep Water Port has the potential to bridge the maritime infrastructure gap and boost economic activities along the South-South, South East, North Central and North-East geo-political zones. It would also ease pressure on the Western Ports (Apapa and Tin Can Island), which at the moment handles about 90 percent of container and cargo traffic into the country. The 35-year concession project cost about $550 million.
Similarly, the Port Harcourt Industrial Park project, which cost $291 million, is proposed to be handled by a design, build, finance, operate and transfer (DBFOT) model. It would promote socio-economic activities across a land area of 84 hectares and when completed will consist of 12 standardised workshops with a total construction area of 100,000-meter square, office blocks of 2,500-meter square, living area of 1,150meter square and other supporting facilities. The project is in partnership with the China Civil Engineering and Construction Company Limited (CCECC) by direct investment plan. FEC also gave approval for the rehabilitation of the reconstruction of Port Harcourt – Maiduguri Eastern Narrow-Gauge Railway at a cost of about $3 billion.
As the government continues to make efforts to increase non-oil revenue and salvage the economy that is bleeding from the effects of COVID-19 pandemic, experts advise the government to block all avenues for corruption and funds’ diversion and ensure that funds are properly accounted for by all MDAs.
