- Budget: Low Revenue Generation Threatens Funds Release
The Federal Government on Tuesday said that the low revenue generation by its Ministries, Departments and Agencies was affecting the implementation of the 2017 budget.
It lamented that with about four months to the end of the year, only 25 per cent or N120bn out of the target of N807bn set for agencies generating revenue only for the Federal Government under the Fiscal Responsibility Act had been realised.
Speaking in Abuja on Tuesday at a workshop on compliance with the Fiscal Responsibility Act, which was organised for senior officers of the MDAs, the Accountant-General of the Federation, Mr. Ahmed Idris, said there was a need for improvement in revenue generation in order to meet the targets set for this year.
Some of the agencies generating revenue for the Federal Government alone under the FRA are the Central Bank of Nigeria, Joint Admissions and Matriculation Board and the Nigerian Maritime Administration and Safety Agency.
Idris lamented that in 2016, the government fixed a revenue target of N1.3tn for the agencies, adding that only 35 per cent of the target was realised.
He said the development made the government to reduce this year’s target to N807bn, with only about 25 per cent so far generated.
Idris stated that the inability of the agencies to meet the expected revenue target had taken its toll on disbursements to the MDAs.
He said, “We only realised 35 per cent of the N1.3tn revenue estimated for 2016. For 2017, it has been lowered to about N807bn and we are now in the third quarter of the year. But what we have been able to realise to date is about N120bn.
“We are now in September, which means we have not even gone half way; we are just hovering around 25 per cent of the estimated revenue for this year as far as Internally Generated Revenue for this year is concerned.”
He added, “We must go back and see what we can use to enhance our revenue generation, otherwise the budget will not be funded and that is why we have gaps in terms of releases. Agencies wonder why certain components of the releases are not made 100 per cent, but this is partly the reason.
“The estimated revenue is not really achieved as expected and therefore the releases could not be made as expected.”
Idris, however, urged the heads of the government agencies to be more creative in revenue generation efforts so that they could meet their individual targets and collectively meet the targeted revenue to fund the budget.
The Minister of Finance, Mrs. Kemi Adeosun, urged government agencies to recognise the current financial priorities of the nation and therefore cut their costs, eliminate wastage and block revenue leakages.
She warned heads of the agencies that under the President Muhammadu Buhari-led administration, the issue of transparency and accountability in the management of government resources would not be compromised.
Adeosun explained that many agencies were engaged in quasi-commercial activities on behalf of the government and were therefore expected to manage those organisations in a manner that would maximise the operating surplus.
She noted that in other countries like the United Kingdom and the United States, government functions such as visa processing, passport issuance, company registration and regulation were major revenue earners.
However, the minister lamented that in Nigeria, many agencies were operating in such a manner that returned minimal funds to the government.
Adeosun said the cause of the dwindling revenue included wastage, illegal recruitments, bloated expenses, loans to employees and use of expensive consultants.
The minister reminded the agencies that a circular had been issued restricting allowable expenses in line with reforms occurring across government business.
She informed the agencies that compliance checks would be undertaken regularly to ensure that all agencies adhered to the new requirements.
Adeosun also commended a number of the agencies that had improved considerably in their revenue remittance to the Consolidated Revenue Fund.
These agencies, according to her, include JAMB, which has remitted over N5bn, and NIMASA, which has significantly improved its remittances.
Adeosun encouraged other agencies to urgently review their operational costs and revenues with a view to increasing remittances to government coffers.
She informed the participants that the Ministry of Finance planned to publish the performance of the agencies.