The record shows that few of the GOEs declare surpluses. In effect, the Nigerian tax payers have not benefitted much from these investments.
Uche Usim, Abuja
The repeated failure of various Ministries Departments and Agencies (MDAs) to remit 80 per cent of their dividend or operating surplus into the Consolidated Revenue Fund (CRF) came under evaluation on Tuesday with the Director General, Budget Office of the Federation, Ben Akabueze, warning them that the Buhari administration would no longer tolerate such appalling revenue underperformance.
He said the development was most worrisome because despite over N40 trillion already invested in the revenue generating agencies by the Federal Government, what was usually remitted to the treasury in terms of dividend or surplus at the end of each operating year remains largely insignificant.
Speaking at a town hall meeting with heads of various revenue generating agencies in Abuja, Akabueze reminded them that under the Fiscal Responsibility Act, revenue underperformance usually made it difficult to implement various government projects as captured in the budget.
The Act stipulates that any government agency that generates revenue must remit 80 per cent of their operating surplus to the Consolidated Revenue Fund account.
Some of the agencies under scrutiny are the Central Bank of Nigeria, Nigeria Deposit Insurance Corporation, Securities and Exchange Commission, Nigeria Shippers Council, Nigeria Export Promotion Council, National Health Insurance Scheme, Nigeria Civil Aviation Authority, and Nigeria Communication Commission.
Akabueze observed that over the years, many of the aforementioned agencies have been underpaying revenue into the coffers of government.
While describing the revenue under performance scenario as totally unacceptable, the Budget Office boss gave a four-year review to buttress his point.
According to him, the budgeted independent revenue of government in 2015 was N489.25 billion, out of which N354.03 billion was generated.
For 2016, he said the government was more ambitious by setting a target of N1.5 trillion, only for the agencies to realise just N398.19 billion.
He said the poor revenue underperformance of 2016 forced the Federal Government to reduce the 2017 target to N807.57 billion, which surprisingly turned out to be worse than the previous years as only N216.66 billion was generated.
For the 2018 fiscal period, Akabueze revealed that the revenue target was pegged at N847.95 billion, pointing out only N302.66 billion has been generated as revenue till date.
He said: “The continuous underperformance of the Government Owned Enterprises (GOEs) has made it difficult to achieve enhanced domestic revenue mobilisation from operating surpluses of the GOEs.”
“The President has mandated that urgent corrective action be taken and for this reason, we have gathered here today. The record shows that few of the GOEs declare surpluses. In effect, the Nigerian tax payers have not benefitted much from these investments.
“Out of the total projected sum of N807.57 billion independent revenues in 2017, only N216.66 billion representing 26.8 per cent performance was remitted by GOEs and revenue generating Ministries Departments and Agencies.”
To address the issue, Akabueze said the Federal Government will unveil various reforms that will strengthen its control mechanisms to make the revenue process more transparent and inclusive, going forward.
“Some of the reforms evolved to address the problems include deployment of new technology to improve collection, upward review of tariffs and tax rates, stronger enforcement action against tax defaulters and tighter performance management framework” he added.
He assured that the reforms would be implemented with unwavering determination to improve revenue collection and expenditure management.
He noted that achieving fiscal sustainability was no easy grind, as it requires bold, decisive and urgent action, adding that from the budget performance between January to September had shown clearly that the country has a “serious revenue challenge.”
He also said the government would be implementing tight expenditure control through issuance of circulars to limit allowable expenses, frequency of board meetings and other wasteful practices.
“Annual GOE capital budget may be mainstreamed into the Federal Government capital budget in order to ensure that they are subjected to the same level of scrutiny, procurement and monitoring processes.
“It shall be mandated for all GOEs to use the Treasury Single Account for all financial transactions, the accounts of GOEs shall henceforth be audited within five months after the end of each financial year,” he added.
Akabueze also said the government would amend relevant sections of the Acts establishing some of the agencies to reflect economic realities and policy thrust of government.
He said the need to amend the act became imperative as some establishing Acts empowers board of agencies to serve as final approving authority over their spending design.