Thursday, 7 January 2016

Federal Government moves to block revenue blockages

Federal Executive Council
Worried by non remittance of revenues to the public coffers, the Federal Government has articulated moves to block all financial leakages in the Ministries, Departments and Agencies, MDAs, of government and make them more resourceful and accountable.

The decision was reached at the meeting of the Federal Executive Council, FEC, yesterday, at the Presidential Villa, Abuja.

Briefing State House correspondents at the end of the meeting, Minister of Finance, Mrs. Kemi Adeosun, and her counterpart in Information, Alhaji Lai Mohammed, said FEC seriously frowned at the government agencies and parastatals that generated poor revenue or nothing to the Consolidated Revenue Funds.

Specifically, Adeosun said FEC had taken an initiative of compelling the MDAs to submit their budgets and operate within them.
She said: “The principal discussion in our meeting today was the initiative by this administration to plug revenue leakages in our MDAs that generate revenue. The presentation to FEC was to remind ministers who supervise these revenue-generating boards of their responsibilities under the Fiscal Responsibility Act, FRA.
“Let me remind you that under FRA, these boards and corporations, who generate poor revenue, are supposed to generate and operate surplus, 80 per cent of which is to be credited to the Consolidated Revenue Fund.
“But we have discovered that many agencies have never credited anything and never generated any operating surplus, including some whose salaries, overheads, capital are paid by the Federal Government. Then in addition to that, they generate revenue which they spend without any form of control.
“So, one of the big initiatives and changes of this administration is to bring all those agencies into line, to insist that they must submit a budget, that budget must be subject to approval and they must operate within that budget so that the surplus that is meant to come to the Federal Government can be seen to be used as appropriate.
“So for clarification, let me just explain that in economies that are non-oil economies, these are the revenues of government. It was because we had oil in the past, nobody has ever really looked at MDAs, NCC, and many other agencies and boards of government.

Warns MDAs against funds diversion
“We had issued a circular in December requesting that they send us their budget and what we discussed today was the responsibility of the ministers to ensure that whether those agencies have boards or not, those budgets are prepared and the Ministry of Finance is going to sit down with the supervising ministers and with the boards concerned where necessary to go through their budgets and make sure that they are reasonable, that the costs are not inflated.
“We are going to make every Naira counts and in order to make every Naira count, we have to know how much is coming in and you control how it goes out. All the ministers concerned agreed that enough is enough and they even identified boards and agencies under them where they know that revenue is being diverted. ”

On agencies that generate dollars and remit Naira

Adeosun also said the Federal Government was not happy with agencies that generate monies in dollars and in some other hard currencies and remit same in Nigeria.

She stated that government had resolved to audit the books of the suspected MDAs with a view to sanctioning them.
She said: “We have done a comprehensive audit of all the agencies that actually collect money in foreign currency and remit in Naira, the requirement is that such monies should go to CBN, which should exchange the money into Naira. What we discovered in some agencies, as you said have been doing that, we have stopped it, but we are now doing an audit to identify other agencies.

No padding of budget by MDAs

The minister also refuted speculations that the 2016 budget was padded by some ministries.
She said: “To answer that question, let me give as context, oil price has come down from $112 to $34-$35, anybody that is talking about padding any budget when there is no revenue, is just not serious.
“I don’t know how to put it but I will like to go further to state that it is unpatriotic and unrealistic. There can be no padding of budget when revenues are so thin and one of the things that I think that the budgeting process is doing is pruning down unnecessary expenditure.”

Credit: Vanguard

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