19 December 2018

Nigeria: CBN, PPPRA, Other Nigerian Agencies Fail to Remit N10 Trillion Surplus - Official

The federal government said on Tuesday, its own enterprises, including the Central Bank of Nigeria (CBN), owe about N10 trillion in unremitted operating surplus as at the end of August 2018.

The Director-General, Budget Office of the Federation, Ben Akabueze, disclosed this during his town hall meeting with Chief Executive Officers (CEOs) of government-owned enterprises (GOEs) in Abuja.

Lamenting the poor returns on investment by the GOEs, records from the Office of the Accountant General of the Federation showed the Petroleum Products Pricing Regulatory Agency (PPPRA) as the worst culprit, with unremitted operating surplus of over N1.3 trillion, followed by the CBN with about N801.2 billion and Nigeria Ports Authority (NPA) with N192.1 billion.

Others include the Nigerian Maritime Administration and Safety Agency (NIMASA) - N66.1 billion; Federal Airport Authority of Nigeria (N51.99 billion); Nigeria Postal Service (N37.7 billion); Nigeria Communications Commission (N30.9 billion); National Inland Waterways Authority (N30.8 billion); National Information Technology & Development Agency (N30.7 billion); Nigeria Airspace Management Agency (N22.8 billion) and National Examination Council (N16.3 billion).

Also owing are the Nigeria Television Authority (N15.6 billion); National Agency for Food, Drugs Administration & Control (N12.3 billion); Nigerian Shippers Council (N12 billion); National Health Insurance Scheme (N8.8 billion); National Pension Commission (N8.7 billion); Corporate Affairs Commission (N7.7 billion); Tertiary Education Trust Fund (N6.1 billion) and Nigerian Civil Aviation Authority (N6.1 billion).

Others include Standard Organisation of Nigeria (N5.6 billion); Securities and Exchange Commission (N5.5 billion); Federal Radio Corporation of Nigeria (5.4 billion); Bureau of Public Enterprises (N4.8 billion); Oil & Gas Free Zone Authority (N3.6 billion); Nigerian Communications Satellite (N3.5 billion); National Automotive Council (N3.4 billion) and Raw Materials Research & Development Council (N2.9 billion).

The Nigerian Export Processing Zones Authority (N1.72 billion); National Insurance Commission (N1.03 billion); Nigerian Nuclear Regulatory Commission (N892.4 million); Financial Reporting Council (N833.8 million); National Centre for Women Development (N346.6 million); National Film & Video Censors Board (N326.9 million); National Office for Technology Acquisition Promotion (N164.5 million); Nigeria Export Promotion Council (N70.6 million) and News Agency of Nigeria (N28 million) were also included.

The records also showed the Nigeria Film Corporation has not remitted about N11.9 million; Cross River Basin Development Authority (N18.5 million); Investments and Securities Commission (N62.2 million); National Sports Commission (N784 million); Asset Management Corporation of Nigeria (N81.8 million); Nigeria Drug Law Enforcement Agency (N85.7 million); Nigeria Investment Promotion Council (N983.9 million); Nigerian Export-Import Bank (N1.23 billion); Federal Government Landed properties (N2 billion); Joint Admissions & Matriculation Board (N2.13 billion); National Sugar Development Council (N3.7 billion); Properties (N4 billion); National Broadcasting Commission (N5.7 billion) and Nigerian Deposit Insurance Corporation N21.8 billion).

Under the Fiscal Responsibility Act 2007, all government agencies are expected to compulsorily remit their operating surpluses to the federation account, annually.

Sections 21 and 22 of the Act, states that "(1) The Government corporations and agencies and government-owned companies listed in the Schedule to this Act (in this Act referred of as "the Corporations" shall, not later than six months from the commencement of this Act and every three financial years thereafter, and not later than the end of the second quarter of every year, cause to be prepared and submitted to the Minister their Schedule estimates of revenue and expenditure for the next three financial years.

"(2) Each of the bodies referred to in sub-section (1) of this section shall submit to the Minister not later than the end of August in each financial year: (a.) An annual budget derived from the estimates submitted in pursuance of subsection (1) of this section; and (b) Projected operating surplus which shall be prepared in line with acceptable accounting practices.

"(3) The Minister shall cause the estimates submitted in pursuance of subsection (2) of this section to be attached as part of the Appropriation Bill to be submitted to the National Assembly."

Section 22 (1) states, "Notwithstanding the provisions of any written law governing the corporation, each corporation shall establish a general reserve fund and shall allocate thereto at the end of each financial year, one-fifth of its operating surplus for the year.

(2) The balance of the operating surplus shall be paid into the Consolidated Revenue Fund of the Federal Government not later than one month following the statutory deadline for publishing each corporation's accounts."

However, Mr Akabueze said on Tuesday that despite investing over N40 trillion cumulatively in the various GOEs, the returns to government coffers in terms dividends or surpluses at the end of each operating years was less than one percent.

To reverse the negative trend, he said government was considering stiff "legislative action in the medium term" by way of amendment to relevant sections of the Acts establishing the agencies to reflect economic realities and policy thrust of government.

He said key reforms will be implemented with increased vigour, to improve revenue collection and expenditure management in the agencies.

Petroleum Products Pricing Regulatory Agency (PPPRA). [PHOTO CREDIT: The Guardian Nigeria]

He expressed concern that debt service to revenue has become worrisome, noting that the current serious revenue challenge government is having may degenerate to a debt sustainability problem if not properly handled.

The Head of Monitoring and Evaluation of Fiscal Responsibility Commission, Ola Tijani, said these agencies must also show proof of prudence, accountability and transparency in financial reporting in order to be in line with the FRA 2007.

Mr Tijani said compliance entails that these agencies prepare and publish their audited financial statement not later than 90 days after the financial year.

He emphasised that without an audited financial statement, there was no way the commission could determine appropriate liabilities. He stressed the need for agencies to reposition their operations to comply with the provisions of the Act.

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