The revelation that revenue-generating agencies refused to remit their operating surpluses of N2.8 trillion to public coffers, in defiance of extant fiscal regulations, underlines how warped the conduct of government business remains. This has jeopardised the implementation of the N9.1 trillion 2018 budget, which has a N1.9 trillion fiscal deficit.
Giving details of the abuse, the Director-General, Budget Office of the Federation, Ben Akabueze, said government had expected N847.5 billion from the agencies, only for them to remit N302.66 billion. The trend is not different from previous years. In 2017, they remitted N216.66 billion as against the estimated projection of N807.57 billion.
A total of 50 agencies are involved in this remiss. Among them are the Petroleum Products Pricing Regulatory Agency withholding N1.3 trillion; Central Bank of Nigeria, N801.1 billion; Nigerian Ports Authority, N192.1 billion; and the Nigerian Maritime Administration and Safety Agency, N66 billion.
With the 2019 budget of N8.8 trillion, having a N1.86 trillion deficit component and the current uncertainties in the global oil market, the aberrant behaviour of these cash cow agencies of government demands a decisive response from President Muhammadu Buhari. Their action is tendentious and decidedly not in the national economic interest.
In the past, it bred the award of phoney contracts and contract-splitting in the Ministries, Departments and Agencies that climaxed in excess liquidity in the system. Some concerned observers have argued that the practice is the origin of billionaires in the bureaucracy, who allegedly own some of the sprawling estates in Abuja, Lagos and elsewhere.
It was in an attempt to halt this drift that Buhari enforced the Treasury Single Account policy in August 2015. According to the CBN, the TSA transaction value hit N13.53 trillion at the end of 2017. Besides, Section 80 (1) of the 1999 Constitution, which states that all revenues of government should be remitted into the Consolidated Revenue Fund of the Federation, does not give any room for compromise. This is reinforced by the Fiscal Responsibility Act 2007, which stipulates that agencies should remit revenue “based on an operating surplus framework.”
Therefore, government should not be spineless in enforcing its writ. Ironically, the N2.8 trillion forms part of the loan portfolio of banks, from which the Federal Government often borrows at high interest rate of 18 per cent to finance its obligations. This is unacceptable.
Further toleration of the intransigence of these errant agencies is akin to the state allowing a culprit to get away with blue murder. Apparently, the action negates the radical and laudable step in accountability at the Joint Admissions and Matriculation Board. In 2017, its Registrar, Ishaq Oloyede, remitted N7.8 billion to the Federation Account to the pleasant surprise of the government and Nigerians. It has remitted a similar amount this year, against the backdrop of the N3 million, which Oloyede’s predecessors were said to have remitted annually.
The JAMB example was an eye-opener, which compelled the Federal Executive Council to direct the Ministry of Finance to probe the activities of former executives of the agency. As usual, government has not followed through with the decision. This is a perverse incentive these agencies exploit, which ultimately ruins the country’s fiscal plans.
Besides the sequestered N2.8 trillion, there is also the stamp duty revenue, which reportedly has hit N20 trillion, but has not been remitted by the banks that collect it on behalf of the Federal Government from every electronic transfer and deposit from N1,000 and above. This is a barometer of weakness of the Buhari administration, which introduced the tax as it battled to stave off the economic headwind that was sign-posted in tumbling global oil prices in 2016.
Given the difficulty envisaged in funding the 2019 budget, it is imperative for the government to enforce accountability in all MDAs and blockage of all revenue leakages.
A House of Representatives Committee on Finance investigation in 2013 had revealed that 60 agencies generated N9.4 trillion between 2009 and 2012, out of which they spent N9.1 trillion. The committee’s chairman, Abdulmumin Jibrin, told the House in plenary: “The agencies are simply bleeding this country dry. Not until we take drastic steps to stop them, huge funds that we would have used to execute capital projects will continue to go down the drain.” The House had advised the Ministry of Finance to ensure that all funds hidden in the agencies’ bank accounts be mopped up and promptly remitted to the CRF. But the ministry moved on until the TSA came into force; such recrudescence has again manifested in its neglect of the FEC directive.
The laws that established these agencies, which give them the carte blanche of sorts, need a critical review that will provide a rampart against malfeasance in public funds management. In the United Kingdom, for instance, the HM Revenue and Customs, the equivalent of our Federal Inland Revenue Service and Nigeria Customs, does not touch or keep part of revenues generated. “We report to Parliament through our Treasury minister who overseas our spending,” it says. This promotes accountability. But sophistry is flaunted in Nigeria to justify the reverse.
Consequently, government’s indifference to measures that will rein in opacity in our fiscal environment is a sign of no end to the havoc the MDAs could cause with excess liquidity at their disposal. The Government Integrated Financial Management Information System or the TSA with sub-accounts linked to it, and maintained at the CBN, has been designed in such a way that agencies have access to funds based on their approved budgets.
That being the case, no agency should be allowed to operate outside a fiscal framework that is not in harmony with extant regulations and national interest.
