Senate Committee on Finance has revealed that 60 government-owned enterprises failed to remit a total of N3trillion in six years, contrary to provisions of the constitution and Fiscal Responsibility Act.
Chairman of the committee, Solomon Adeola, who revealed the development to journalists, yesterday, stated that the breach was uncovered during the panel’s ongoing investigation of remittances by Ministries, Departments and Agencies (MDAs).
The failure of key revenue-generating agencies to pay what they generated into the Consolidated Revenue Fund (CRF) has been a source of financial bankruptcy of the Federal Government and a cause of huge borrowing, particularly from 2015 to date.
With the approval of a fresh foreign loan of N1.1 trillion for the Federal Government by the National Assembly in April 2021, Nigeria’s total debt stock is in the process of hitting N34 trillion from N33 trillion.
The latest foreign loans approved for the government by the Senate are $1.5 billion (about N571.5billion) and €995 million (about an N528.4billion).
Before April 21, 2021, legislative approval, the Debt Management Office (DMO) had, in the previous month, but the nation’s public debt at N32.915trillion as of December 31, 2020.
In the current 2021 national budget of N13.588 trillion, N5.196 trillion was approved as deficit while another N3.324 trillion was voted for debt servicing.
The budget is based on a projected aggregate revenue of N7.886 trillion, including N3.502 trillion from the Federal Government’s share of the federation revenue and another N1.348 trillion from government-owned enterprises.
The Senate committee said its investigation of revenue remittances by the MDAs between 2014 and 2020, and payment of one per cent Stamp Duty on all contract awards by the MDAs within the same period had prompted a meeting with Minister of Finance, Budget and National Planning, Hajia Zainab Ahmed; Director-General of Budget Office, Mr. Ben Akabueze, and the Auditor General of the Federation, Mr. Idris Ahmed, as well as heads of other agencies.
Adeola said that at the meeting; the committee briefed the minister and others on what the lawmakers discovered during the over four weeks of investigation, particularly on how many of the agencies committed all manner of illegalities relating to the spending of government funds that should be paid into the CRF.
According to the committee chairman, most of the agencies abused the concept of operating surpluses to shortchange government, by relying on ministerial circulars instead of the nation’s constitution and the Fiscal Responsibility Act, 2007 passed by the National Assembly.
“In view of the huge deficits accompanying our yearly budgets and the resort to huge borrowing to finance these deficits, the committee decided to probe into the revenue remittances by agencies of government as the nation cannot continue to borrow yearly while the revenue from agencies that the government is financing with the borrowings are spent contrary to the laws of the land.
“From submissions already made and calculations from the Fiscal Responsibility Commission, about 60 Government Owned Enterprises (GOEs) may have about N3trillion of government revenue still unremitted in their coffers or already spent on frivolous things contrary to the constitution and FRA, 2007.
“If these revenues are paid to the CRF for proper appropriation by the parliament during budget considerations, we would have been using them to reduce dramatically the size of our deficit and hopefully minimize our borrowing,” Adeola said.