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FG Moves Against Agencies Over Financial Abuse

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  • FG Moves Against Agencies Over Financial Abuse

The Federal Government has decided to come down hard on some its revenue-generating agencies accused of engaging in activities that are considered to be abuse of the revenues they generate.

Instead of remitting the revenues to the Federation Account, the agencies were said to be diverting them through several illegal means and ploys.

The Minister of Finance, Mrs. Kemi Adeosun, was said to have briefed a meeting of the National Economic Council presided over by Vice-President Yemi Osinbajo on the development.

Anambra State Governor, Willie Obiano; Bauchi State Governor, Muhammed Abubakar; and the Minister of State for Petroleum Resources, Ibe Kachikwu, briefed State House correspondents at the end of the meeting held inside the Presidential Villa, Abuja.

Obiano said the council was told that the Ministry of Finance and the Revenue Mobilisation Allocation and Fiscal Commission were working together to stop the financial abuse said to have been going on for a decade.

He, however, did not name the agencies involved in the said sharp practices.

Obiano said, “The Minister of Finance detailed to the council certain activities of some revenue-generating agencies that amounted to financial abuse of the revenues they generate, which are meant to have been remitted to the Federation Account, but diverted through several undue and illegal means and ploys.

“The activities include paying salaries above the specifications of the RMAFC; converting official cars to personal ownership under 48 hours of purchase; inappropriate and arbitrary monetisation of medical allowances; undue and excessive overseas travels, lavish training allowances and conference spending; and excessive and personal loan approvals, including unapproved mortgages, among others.”

The governor added, “The Ministry of Finance and the RMFAC are working together to rein in this abuse as these revenue agencies raise as much as N1.5tn yearly and spend almost 90 per cent of it on recurrent expenditure in clear violation of due process and the Constitution.

“The minister added that this financial abuse has been going on for a decade, whereby the agencies hide revenues that ought to go into the Federation Account, but assured the council that such activities will now be exposed and terminated as directed by the President.”

Although Obiano did not mention the names of the affected government agencies, a source who attended the meeting told our correspondent that the agencies were the same as those that were recently indicted for collecting revenues in foreign currencies but remitting to the Federation Account the naira equivalents.

He said, “This revelation is a continuation of the searchlight being beamed on the country’s revenue-generating agencies. You know there was a time some of them were accused of collecting revenues in foreign currencies but remitting to the Federation Account the naira equivalents.

“They are the same set of agencies. They include the Federal Inland Revenue Service, the Nigeria Customs Service and the Nigeria Ports Authority, among others.”

Another source, who also attended the meeting, said Adeosun mentioned federal hospitals and schools as others engaged in the act.

The source, however, said the minister was not specific on the federal hospitals and schools involved.

“The Minister of Finance specifically mentioned hospitals and schools in her presentation,” the source added.

Obiano also said Adeosun put the balance in the Excess Crude Account at the moment at $2.4bn.

On the budget support loan facility, the governor said N1.1bn was disbursed in October to 35 states and that a total of N6.3bn had now been disbursed to each of the 35 states.

He added that governors brought up the alleged N2bn ecological fund said to have been paid to some states by the last administration under unclear circumstances and criteria.

“There were complaints that state governments did not have equal access to the fund amid allegations of political preferences. Vice President Osinbajo assured the council that the matter would be properly investigated, broadly reviewed and that forthright counsel would be made to the President regarding the matter,” Obiano stated.

Abubakar said the council was also briefed on measures being put in place to energise Micro, Small and Medium-scale Enterprises to drive economic growth.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Finance

Government Revenue Surges to N2.07trn in January 2024, FAAC Discloses

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FAAC

The Federal Accounts Allocation Committee (FAAC) has revealed a significant surge in government revenue to N2.07 trillion in January 2024.

This substantial increase reflects the buoyancy of Nigeria’s economic activities despite various challenges faced by the nation.

According to FAAC’s communiqué issued after its monthly meeting in Abuja, the N2.07 trillion revenue was distributed to meet the financial needs of the federal, state, and local governments.

N1.15 trillion out of the total revenue was disbursed to the various tiers of government, indicating a robust financial inflow.

The breakdown of the revenue distribution showcased that the Federal Government received N407.267 billion, state governments obtained N379.407 billion while N278.041 billion was disbursed to local governments.

Also, N85.101 billion, equivalent to 13% of mineral revenue, was allocated to the states as derivation revenue.

FAAC also highlighted that the revenue composition included N463.1 billion from distributable statutory revenue, N391.8 billion from distributable Value Added Tax (VAT) revenue, N15.9 billion from Electronic Money Transfer Levy revenue, and N279.03 billion from exchange difference revenue.

Despite the impressive revenue figures, FAAC noted a decrease in VAT collection by N71.7 billion compared to the previous month.

This decrease suggests fluctuations in consumer spending and economic activities, which could be influenced by various factors such as policy changes, economic conditions, and consumer sentiment.

Furthermore, FAAC reported increases in revenue from Companies Income Tax, Import Duty, Petroleum Profit Tax, and Oil and Gas Royalties.

However, revenue from Value Added Tax, Export Duty, Electronic Money Transfer Levy, and CET Levies experienced declines during the period.

FAAC’s disclosure of the January 2024 revenue underscores the importance of prudent financial management and effective allocation of resources to drive sustainable economic growth and development in Nigeria.

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Finance

Private Sector Credit Hits Record High of N76.94 Trillion in January 2024 – CBN Report

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Private employers

Private sector credit in Nigeria reached a record N76.94 trillion in January 2024, according to the latest report from the Central Bank of Nigeria (CBN).

This represents a 85.2% year-on-year increase from N41.54 trillion reported in January 2023.

The CBN’s Money and Credit Statistics report unveiled that credit to the private sector experienced a substantial month-on-month surge of 23.06%, or N14.42 trillion, from N62.52 trillion in December 2023.

This surge occurred amid the implementation of the CBN’s policy to unify the naira exchange rate.

Analysts attribute the reported N76.94 trillion credit to the private sector to the recent depreciation of the naira against foreign currencies.

The naira closed at N1,356.88 per dollar in January 2024, representing a 50.87% decline or N457.49 against the dollar compared to December 2023.

This depreciation compelled banks to extend credit to major corporations to meet the CBN’s mandated Loan-to-Deposit Ratio (LDR) threshold.

The CBN’s decision to resume the enforcement of the LDR policy, effective July 31, 2023, further propelled banks to increase lending to customers, stimulating the real sector of the economy.

With the CRR mechanism updated, banks with an LDR below the prescribed level faced a 50% lending shortfall penalty.

Experts suggest that the significant increase in private sector credit underscores the growing need for businesses to secure funds amidst economic uncertainties and exchange rate volatility.

It also signifies banks’ efforts to comply with regulatory requirements and support economic growth initiatives.

As Nigeria navigates its economic landscape, stakeholders anticipate further developments in credit dynamics and monetary policies to sustain financial stability and stimulate economic expansion.

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Loans

Senate Initiates Probe into N30tn Ways and Means Loans under Buhari Administration

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Muhammadu Buhari

The Nigerian Senate has embarked on a comprehensive investigation into the disbursement and utilization of the N30 trillion Ways and Means loans obtained by the Central Bank of Nigeria (CBN) during the administration of former President Muhammadu Buhari.

The Ways and Means facility allows the CBN to provide financial support to the government to cover budget shortfalls.

The decision to probe the massive loans comes amid concerns about the transparency and accountability surrounding the utilization of these funds, particularly as the country grapples with economic challenges, food crises, rising inflation, and worsening insecurity.

The Senate’s investigation aims to shed light on how the substantial overdrafts from the CBN were acquired and expended under the leadership of former President Buhari.

There is growing apprehension that the indiscriminate spending of the overdrafts, particularly during Godwin Emefiele’s tenure as CBN governor, may have contributed significantly to the current economic predicament facing the nation.

The probe will delve into the details of the N30 trillion overdrafts, with a specific focus on examining the purpose for which the funds were allocated and how they were utilized.

Also, the Senate will scrutinize the N10 trillion disbursed under the Anchor Borrowers Scheme, as well as the utilization of $2.4 billion out of the $7 billion earmarked for forex transactions.

The initiative underscores the Senate’s commitment to ensuring transparency, fiscal responsibility, and prudent financial management in the country’s economic affairs.

It is anticipated that the probe will unearth vital insights into the financial transactions of the past administration, enabling corrective measures to be taken to address any mismanagement or discrepancies discovered.

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