The recent revelation by the Fiscal Responsibility Commission that 122 Federal Government agencies have failed to remit N1.2 trillion to the Consolidated Revenue Fund has once again exposed the inability of the government to enforce financial regulations. This raises doubts about the resolve of the current regime to ensure transparency and accountability in Nigeria’s bloated and ineffectual public service. Such blatant violation of statutory financial obligations by government agencies should be curbed.
The Fiscal Responsibility Act mandates government agencies to remit into the CRF, their operating surplus after every fiscal year. 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. It smacks of irresponsibility and insensitivity that a government that has asked Nigerians to endure increased taxes and tariffs in the middle of harsh economic realities occasioned by COVID-19 and a drop in oil prices cannot play its part by ensuring that public funds are well-managed and accounted for.
The unremitted fund, which translates to $3.1 billion, is 10 per cent of the amended 2020 budget and can fund the combined budget for education, health, works and housing, which stands at N1.2 trillion. But this is not the first time government agencies will violate financial regulations. In December 2018, the Director-General, Budget Office of the Federation, Ben Akabueze, said government-owned enterprises, including the Central Bank of Nigeria, owed about N10 trillion in unremitted operating surpluses as of August 2018. Quoting a report from the Office of the Accountant-General of the Federation, he stated that the Petroleum Products Pricing Regulatory Agency was the biggest culprit, with unremitted operating surplus of over N1.3 trillion, followed by the CBN with about N801.2 billion and Nigeria Ports Authority with N192.1 billion. 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 one per cent. In the midst of these unaccounted funds, Nigeria’s debt profile has reached unprecedented levels with 44 per cent of the N10.8 trillion budget earmarked for debt servicing. How shameful!
Sadly too, the anti-corruption agencies that ought to promote accountability and enforce fiscal laws have also been found wanting. According to a 2016 report by the Office of the Auditor-General of the Federation issued in 2019, the Economic and Financial Crimes Commission reported about N13.96 billion as salaries and wages in its consolidated financial statement, but it was not included in its trial balance submitted for reconciliation. The report further listed the EFCC as one of the agencies with “doubtful cash balance” of over N315 million.
The Department of Petroleum Resources, which has the statutory responsibility of ensuring compliance to petroleum laws, regulations and guidelines, is not left out from the ignominious behaviour. In August 2020, the DPR, by its own admission before a joint Senate Committee, stated that only N44.5 billion out of the N2.4 trillion it generated in 2019 was remitted to the CRF. It stated that out of the N2.4 trillion generated in 2019, N88 billion was removed as four per cent cost of collection out of which N5.72 billion was remitted and the balance used for overheads; it provided neither specific figures nor further explanation. Similarly, the Securities and Exchange Commission revealed that it generated N8.3 billion in 2019 but spent N10.3 billion on the salaries of about 600 workers, meaning that it ran at a deficit. The figure also implies that an average of N15.7 million is spent annually on each SEC employee.
The inflation of budget estimates for personnel cost and overheads has served as a conduit through which government agencies divert public funds. A probe by the Independent Corrupt Practices and Other Related Offences Commission of this gross abuse and inflation or “padding’’ of the nominal roll by some institutions led to the recovery of N9.2 billion in November 2019. Such funds, said the ICPC, are used for bogus expenses like Duty Tour Allowance at the expense of taxpayers. According to a report by the audit firm, PwC, the cost of governance remains a cause for concern, as recurrent expenditure continues to grow annually. It said that as of 2018, government personnel consumed about one-third of the national budget. The budget for such recurrent expenditure recorded a 92 per cent implementation rate. This undermined the implementation of the more critical capital budget, which stood at just 58 per cent in the same year. This is definitely not how to run a country.
But all hope is not lost. The government can improve accountability in the public sector and boost revenue by strengthening fiscal laws and enforcing existing ones. Section 85 (2) of the 1999 Constitution which states that public accounts of the federation shall be audited and reported on by the Auditor-General who shall submit his reports to the National Assembly, defangs the Auditor-General in Section 85(3) by disempowering him from auditing the accounts of government statutory corporations, commissions, authorities, agencies, including all persons and bodies established by an Act of the National Assembly. This is counter-productive since these agencies actually generate revenue.
The government must ensure that the Treasury Single Account is fully implemented with no exception, while all revenue generating agencies must be added to the Integrated Payroll and Personnel Information System. This would help in weeding out “ghost workers” and save funds. The National Assembly must live up to its constitutional responsibility by carrying out its oversight functions in an honourable and transparent manner. Reports submitted to the parliament by the Auditor-General of the Federation ought to be looked into swiftly and in accordance with the law. The Audit Reform bill, which seeks stiff penalties for agencies that fail to remit revenue, should be swiftly passed and assented to by the President.
As the government continues to make efforts to increase non-oil revenue and salvage the economy that is bleeding from the effects of the COVID-19 pandemic, the best way to secure the buy-in of Nigerians is to demonstrate that their hard-earned funds are no longer being diverted; this can only be done by ensuring that funds are properly accounted for. This is the best way to win citizens’ confidence and ensure compliance with tax payments.
