The federal government is set to take over direct custody of revenues generated by its key agencies as part of efforts to improve income generation and block leakages.
Many federal government revenue generating agencies, commissions and enterprises are being accused of either spending at will most of the monies, they generated not declaring correct figures.
It was learnt that specialised directors from the Office of the Accountant- General of the Federation would be posted to 10 revenue-generating agencies of the government in the first instance.https://secureframe.doubleclick.net/container.html?ecs=20200923
These include the Nigerian National Petroleum Corporation (NNPC), Nigerian Ports Authority (NPA), Nigeria Maritime Administration and Safety Agency (NIMASA), Federal Inland Revenue Service (FIRS), Nigeria Customs Service (NCS), Corporate Affairs Commission (CAC), Department of Petroleum Resources (DPR), Nigerian Communications Commission (NCC) Federal Airports Authority of Nigeria (FAAN) and Nigeria Shippers’ Council (NSC).
The Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, gave the hint at the opening of a three-day orientation programme for 50 directors of revenue who are to be posted to various Government-Owned Enterprises (GOE).
According to her, the initiative was in compliance with a presidential approval conveyed via a circular reference SGF.50/S.3/C.9/24 of 16 October 2018, on the approved Revenue Performance Management Framework for Government-Owned Enterprises (FGOEs).
How the directors would work
The finance minister said, “Government is increasingly concerned with the dwindling profile of revenue and this trend has to be quickly arrested particularly with key revenue generating agencies of the government.
“Analysis of budgets of some of the FGOEs show that they have the capacities if properly managed, to significantly improve the revenue base of the federal government.
She noted that it was in this light that the deployment of the treasury directors was considered expedient as a pilot project.
“The discharge of these duties will be aided with the deployment of information technology. The Integrated Revenue Monitoring System is being put in place to help the monitoring of the revenues of the FGOEs online real-time and to ensure its improved transparency and accountability,” she said.
“It is my considered opinion that the presence of directors of revenue at the FGOEs will ensure strict adherence to extant rules and regulations in the areas of compliance to the approved budget and due process mechanism in procurement and payments.
“The directors of revenue, in the course of the discharge of their functions shall be involved in the revenue operations of the FGOEs, have a better understanding of business processes and operations of the FGOEs and cause improved transparency and accountability in revenue reporting by the FGOEs.
“In addition, they are expected to seek opportunities and avenues for revenue improvements, which are the ultimate aim of the government,” she said. Also, the Secretary to the Government of the Federation (SGF), Boss Mustafa who was represented at the event, said only through professional treasury officers that the government would get a better understanding of the business processes and operations of its revenue-generating agencies. According to him, “Government has noted that a number of GOEs remit less operating surpluses to the Consolidated Revenue Fund than is required by law and/or financial regulations.
“All the GOEs concerned should cooperate with the treasury officers posted to them so as to achieve this noble objective of the government. They are to be regarded as partners in progress that they are and be allowed unfettered access to relevant information and records.
“The policy is a reform initiative aimed at generating more revenue and associated remittance into the government treasury and to also improve the operational performance of all GOEs. Hitherto, the government has noted that a number of GOEs remit less operating surpluses to the Consolidated Revenue Fund than is required by law and/or Financial Regulations,” he said.
Earlier in his speech, the Accountant General of the Federation, Ahmed Idris said what they planned to achieve by sending the directors to key revenue-generating agencies was transparency.
He added that the government was poised to improve revenue performance including a sustainable source of funding budgets and other programmes that would uplift the lives of the people.
Posting revenue directors only temporary remedy – Fasua
An economist, Tope Fasua, said on Tuesday that federal government’s policy on posting revenue directors to key revenue-generating agencies to plug leakages and ramp up revenue collections is only a temporary remedy to a multi-faceted problem.
Fasua, who is the Secretary of Daily Trust Board of Economist said the federal government needed to consider the extant laws establishing the agencies in respect of their independence in such a way that this intervention would not violate the laws backing their functions.
Financial expert, Musa Hadi expressed fears that the revenue directors would also be compromised. “They are humans and they are Nigerians,” he said.
“What we need is serious reorientation; we need to change the mindset of our people and government should also meet the basic needs of people to reduce their obsession with money. Many people are corrupt because they are afraid of the unknown,” he said.
He said Nigeria also had expenditure problem and this was where the government should work on to block revenue leakages and channel scarce resources into critical expenditure needs.
“We have an expenditure problem, which most of them are not talking about. If the budget is still driven by the envelope system, where every ministry or agency shows up with a luxury list of what they want to buy, which does not fit into a national agenda, then there is a problem,” he said.
He said there should be a holistic review of how the public sector in Nigeria was run otherwise the revenue directors will do little or nothing to achieve their mandate.
He advised the federal government to buy made-in-Nigeria goods, such as locally manufactured vehicles, to cut costs of governance.
“No government person should buy anything not made in Nigeria. That is the way it should be. In the UK and US, that is the way it is,” he said.
The expert said Nigeria does not only have a revenue problem but a debt problem.
Revenue generating agencies under scrutiny
Daily Trust recalled that the Fiscal Responsibility Commission (FRC) recently disclosed that 122 agencies have failed to remit over N1.22trn operating surpluses into the consolidated revenue fund.
And during the presentation of the 2014-2017 Federal Audit Report by the Centre for Social Justice (CSJ) on Monday, the NNPC, DPR and FIRS were alleged to have made illegal deductions from the Federation Account estimated at N5.786 trillion during the time under review.
The allegation was contained in the audit report of the Auditor General of the Federation which was supported by the European Union and the British Council.
The report presented by the Programme Officer of CSJ, Fidelis Onyejegbu, showed that NNPC led the unauthorised deductions with N4.5 trillion; FIRS followed with N951 billion and DPR had N334bn.
It also said some key Ministries, Department and Agencies (MDAs) failed to remit N141.3bn of internally generated revenues and unspent funds into the Consolidated Revenue Fund (CRF) between 2014 and 2017.
Lead Director of CSJ, Eze Onyekpere, said the objective of the presentation was to improve federal revenue audit practice by putting the issues in the front burner of public discourse.
However, the NNPC and the DPR denied the claim of illegally deducting N4.5trn and N334bn respectively. The agencies said they couldn’t have deducted from the account since they run cashless accounts.
The DPR spokesman, Paul Osu, said the audit report was old and the agency had since debunked the claims made in it. “It was not possible to illegally deduct from Federation Account when the cashless policy is in place.”
NNPC spokesman, Kennie Obateru, also said NNPC didn’t deduct from the Federation Account.
The Director of Communications at FIRS, Mal. Abdullahi Ismaila said he was not aware of such deductions but promised to verify the true position of the agency and revert.
Why Nigeria’s economic growth stalled for 30-years- Sanusi
The former Emir of Kano State, Muhammadu Sanusi II, on Tuesday explained why Nigeria’s economy has remained stagnant in 30 years even as he called on the Federal and state governments to invest in human capital development.
Sanusi, a former Governor of Central Bank of Nigeria (CBN) who was speaking as the keynote speaker on the second day of Kaduna Investment Summit said over-reliance on crude oil due to wrong economic decisions has put a huge strain on Nigeria’s diversification growth, thus, hampering economic growth.
The fifth edition of Kadinvest has the theme: Infrastructure, industrialisation and Innovation.
Making a 30-year comparison of economic growth and structural change between Nigeria and Malaysia, the former CBN governor said between 1970 and 2000, Malaysia’s GDP per capita increased from $310 to $4,045 adding, “There was growth and diversification into higher-value areas of the GDP.”
According to him, “In the same 30 years (1985-2015) Nigeria’s GDP per capita also increased from $345 to $2,655 so we were growing but did not diversify and that explains the huge levels of poverty in the country, inequality and the vulnerability of the economy to shocks in terms of trade and it also explains the relatively slow pace of growth. We have not moved, this is the difference between us and Asia, they have moved,” he said.
Sanusi cautioned that the CBN was reaching the limit of its balance sheet and the consequence is projected in inflation and exchange rate.
“We should not put so much pressure on the CBN and we should not have so many expectations on the government. The government should not take upon itself responsibilities it cannot take. You cannot continue borrowing and sinking us into indebtedness to provide development today. Spend more time creating the environment, spend more time on reforms and attracting local and foreign investments while you fix your balance sheets and then are able to prepare,” he said.
He said that for any meaningful growth to take place, the country must move from being a consumer to producer of innovation saying with Nigeria’s technological investments in broad bands, tours and internet, it is time to invest in human capital.