Home News Government agencies squander N12tr while FG’s attention is on oil
Government agencies squander N12tr while FG’s attention is on oil

Government agencies squander N12tr while FG’s attention is on oil

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Hundreds of government agencies generated above N12 trillion between 2009 and 2012, but unilaterally spent nearly all of that amount while the federal government busied itself with relatively easy oil money, a study by the National Assembly Budget Office says.

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While the federal government busied itself with relatively easy oil money,Hundreds of government agencies generated above N12 trillion between 2009 and 2012

The report indicts several government offices for hiding revenue sources, claiming losses where non-exists, and failing to remit stipulated portion of their internally-generated funds to government coffers, cash that could help fund the budget.

While several factors allowed the abuses to thrive for years, the most outstanding was the government’s indifference about developing alternative sources of revenues as it appeared content with huge oil and gas receipts, the report says.

“Many reasons are responsible for this fundamental lapse,” the report states. “But the major reason is the government’s over-reliance on proceeds from hydrocarbons with scant or no serious thoughts on the imperative for these agencies to generate and remit any surplus revenues.”

The report, prepared by the National Assembly Budget and Research Office, said the agencies under study generated N12.24 trillion internally between 2009 and 2012, representing a yearly average of N3.06 trillion. That figure excludes Nigeria National Petroleum Corporation (NNPC) (just one of NNPC’s subsidiaries, National Petroleum Investment Management Services, generated average annual revenues of N3.19 trillion between 2009 and 2011).

But while the agencies were expected to remit only a relatively paltry N512.11 billion to the government between 2009 and 2012, they only paid N264.74 billion to the government, amounting to just 10.3% of their total internally-generated revenue.

The Constitution requires all government funds be paid into the Consolidated Revenue Fund. Under the Fiscal Responsibility Law, agencies are expected to pay in four-fifth (80%) of their operating surplus.

The National Assembly study said majority of the agencies either failed to remit the appropriate sum, of failed paid nothing at all for years.

While some agencies declared “curious” losses, others kept certain revenue sources from scrutiny, the study conducted in collaboration with the Federal Public Administration Reform Programme Nigeria (FEPAR) said.

For example, the Export Processing Zones Authority excluded items like the gains on disposal of its fixed asset, exchange gains and other incomes amounting to N9 million in 2010. The amount rose to N137.10 million in 2011.

The News Agency of Nigeria, also limited its report of earnings to income earned from news subscription. The agency refused to state that it received revenues from other sources amounting to N41.84 million in 2011.

Surplus

Put together, the internally-generated review of the agencies covered declined from N3.16 trillion in 2009 to N2.88 trillion in 2011, but increased marginally to N2.93 trillion in 2012.

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Internally-generated review of the agencies covered declined from N3.16 trillion in 2009 to N2.88 trillion in 2011

The figures themselves were largely poor, from institutions with capacity to generate more money for the government, the report notes.

“The poor performance of these agencies over the years is inextricably linked to the use of these agencies as platforms for political patronage, parasitism, and rent-seeking for the political class and the elites,” the document states.

“Dues to the above reasons, there has been no serious oversight by either the executive or the legislature on the activities, performance and deliverables from these agencies.”

Even so, while some agencies refused to forward stipulated amount of money, others claimed they had no profits. Examples in this category are Federal Radio Corporation of Nigeria, Financial Reporting Council of Nigeria, News Agency of Nigeria, Nigerian Civil Aviation Authority, Nigerian Copyright Commission, and Nigerian Export Promotion Zones Authority.

The study cited the National Institute for Pharmaceutical Research and Development as a “puzzling case” in which the institute claimed it never made profits since 2006. The West African Examination Council posted similar claims, the report says.

In one surprising case, according to the report, the Lagos International Trade Fair, which claimed losses between 2009 and 2011, backtracked after meeting with the House of Representatives committee on finance. The study said the office promptly cleared a N3.75 million fixed deposit with a bank and made payment into the consolidated revenue fund in December 2012.

Offices that paid nothing into government coffers include Federal Housing Authority, Industrial Training Fund, National Lottery Regulatory Commission, National Sports Commission, National Teachers’ Institute, Nigerian Agricultural Insurances Corporation and WAEC.

Those that attempted to make adequate remittances include Central Bank of Nigeria, Universal Basic Education Commission and the Federal Road Safety Commission.

The federal government has nearly 600 agencies covering a wide spectrum of activities. The agencies control trillions of naira, but paradoxically, account for only 5% of the federal government budget deficit financing.

(http://telegraphng.com)

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