FG goes hard on MDAs, says 36 federal agencies yet to remit over N2.7trn


Thirty six federal agencies, including the Petroleum Pricing Regulatory Agency, Central Bank of Nigeria, Nigeria Ports Authority, among others, owed government a whopping N2.671 trillion operating
surpluses as at end August, 2018, Ben Akabueze, Director General, Budget Office said on Tuesday, as he announced a new framework that would ensure tighter compliance in remitting monies generated by the Government Owned Enterprises (GOEs) going forward.

Figures reeled out by Akabueze indicted 50 agencies, with the Petroleum Pricing Regulatory Agency yet to remit up to N1.34 trillion; Central Bank of Nigeria, N801.18 billion;
Nigeria Ports Authority, N192.102 billion as well as the Nigerian Maritime Administration and Safety Agency (NIMASA),
N66.08 billion, among others.

The Performance Management Framework which he announced in Abuja would institute Corporate Governance enhancement practices, including
performance contracts for Chief Executive Officers (CEOs) and other
key Management Staff; Set financial indicators and targets for each GOE; ensure a Monthly publication of revenue and expenditure performance for all GOEs; as well as quarterly publication of GOE’s
Budget Performance.

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At a town hall meeting with Chief Executive Officers of Government agencies, Akabueze regretted that despite huge sums – put at approximately N40 trillion -which the Federal Government has invested
in these agencies, what they usually remitted to the Treasury in terms of dividend or surplus at the end of each operating year is mostly insignificant.

Historical independent revenue inflows into the federation account
shows that in 2015, actual revenue collection was N354.03 billion, 27.6 percent lower than the N489.29 billion budgeted; in 2016,
N398.19bn was collected as against N1.505trillion budgeted; in 2017, N216.66 billion was collected as against N807.57 billion budgeted; and
in 2018, N302.66billion was collected as against N847.95 billion
budgeted.

He told Chief Executive Officers (CEOs) and other key Management Staff of government agencies that the continuous underperformance of their
offices has made it difficult to achieve enhanced domestic revenue mobilization from operating surpluses of the enterprises.

He admitted that Nigeria faces significant medium-term fiscal challenges, especially with respect to revenue generation as indicated
by the FY2017 and Jan – Sept 2018 budget performance, adding that
achieving fiscal sustainability and macro-fiscal objectives of government would require bold, decisive and urgent action.

“The record shows that few of the GOEs declare surpluses. In effect, the Nigerian tax payers/general public have not benefited much from
these investments agencies,” Akabueze said.

Out of the total projected sum of N807.57bn independent revenues in 2017, only N216.66 billion, representing 26.8 percent performance, was
remitted by GOEs and revenue generating MDAs, he re-emphasised, noting that remittances and collections by Government agencies should
contribute more significantly to FGN’s revenue.

Recall that concerns about financial performance of GOEs gave rise to Executive Order 2 of 2017 and the circular ref SGF.50/S.3/C.9/24 recently issued by the Secretary to the Government of the Federation
(SGF).

With the Executive Order 2, President Buhari had directed that, “All agencies whether or not listed on the Fiscal Responsibility Act, shall, on or before the May of every year, cause to be prepared and
submitted to Minister of Finance and Minister of Budget and national Planning, their schedule of Revenue and expenditure estimates for the
next three years’.

Akabueze noted that the situation warranted additional compliance measures and that with the Performance Management Framework,
government expects a significant improvement in remittances by revenue-generating and collecting agencies in order to strengthen the
Federal Government’s finances.

Another key imperative of the new framework is to bring the activities of these agencies into the budgetary framework and process and
establish revenue Department in GOEs to be manned by Professional Treasury Officers from the Office of the Accountant General of the
Federation (OAGF).

The framework would also ensure institutionalizing appropriate sanctions for utilizing IGR without approval or waiver from the Budget
office.
It would also be deployed to consolidate at least the major agencies in the fiscal forecasting, budgeting and financial reporting of the FGN in order to make the process more transparent and inclusive.

Akabueze said the new framework would also institute expenditure controls, including issuance of Finance Circulars to limit allowable
expenses, frequency of board meeting, and other wasteful practices.

According to the head of budget office, “It shall be mandatory for all GOEs to use the Treasury Single Account (TSA) for all financial transactions.

“Quarterly remittance of interim operating surplus by the GOE shall replace the annual remittances while cumulative remittances at the end
of the year will be reconciled to amount due after audit,” he stressed.

“The Accounts of GOEs shall henceforth be audited within four (4) months after the end of each financial year.

“The computation of the operating surplus shall be reviewed to allow the deduction from the agency’s revenues of only operational expenses, wholly, reasonably and necessarily incurred in its operations,” he added.

He further noted that as part of the reforms and to achieve outlined objectives, legislative action may be required in the medium term, including amending relevant sections of the Acts establishing some of the GOEs to reflect economic realities and policy thrust of government.

He mentioned, for instance that some establishing Acts, empower the Boards of agencies to serve as final approving authorities over their spending plans, while some others appear to have been precluded from the requirement to remit operational surpluses.

Onyinye Nwachukwu, Abuja