Government to sanction agencies over financial regulations breach

By Timothy Choji, Abuja

The Nigerian government is to sanction revenue generating agencies that spend the money they generate without remitting same to government.

The move is to help check the excesses of such agencies that are breaching financial regulations that guide their activities.

The Anambra State Governor, Dr Willie Obiano said this while briefing Journalists after the meeting of the National Economic Council in Abuja.

Governor Willie Obiano
Governor Willie Obiano

Governor Obiano said that the Minister of Finance, Mrs Kemi Adeosun told the Council that some of these agencies been abusing financial regulations for over a decade now but the Ministry was working closely with the Revenue Mobilisation and Fiscal Commission to address the problem, to boost government’s revenue base.

 “The Minister informed the Council of certain activities of some Revenue Generating Agencies that amounted to financial abuses of the revenue they generate which would have been remitted to the Federation Account, but diverted through several undue and illegal means. The Ministry of Finance and the Revenue Mobilisation Allocation and Fiscal Commission RMFAC are working together to rein in these abuses as this revenue agencies raise as much as 1.5 trillion Naira yearly, and spend almost 90% of it on recurrent expenditure in clear violation of due process and the constitution,”  he explained.

Abusing financial laws
The Governor further explained ways in which the defaulting agencies have been flouting financial laws.

“These financial abuses include paying salaries above 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, excessive and personal loan approvals, including unapproved mortgages among others,” he stated.

Excess Crude
Governor Obiano gave the balance on the nation’s excess crude account as at date, which he according to him, stands at two point four billion Dollars.

He stressed that the Council received complains about the disbursement of two billion naira ecological funds by the immediate past government, out of which some states were short-changed. He added that the matter would be investigated.

Financial Support
The Bauchi State Governor, Abubakar Mohammed who also briefed State House Correspondents, said Micro Small and Medium Scale Enterprises, MSMEs would be given the needed financial assistance by the Nigerian government, to enhance their capacity of stabilising the economy.

Governor Mohammed said that the decision to support the enterprises was taken after the Central Bank Governor, Dr Godwin Emefiele briefed the Council.

“The reason for the CBN’s involvement in MSMEs is to increase lending, provide access to affordable credit facility, and diversify the economic base, create jobs and improve microeconomic stability. Other reasons include to boost the capacity of MSMEs, conserving foreign exchange reserve, encourage export and the expansion of agriculture, manufacturing and to service other sub-sectors,’’ he explained.

The Governor stressed that the CBN has a fund for such purposes in excess of 200 billion Naira meant to provide affordable loans to MSMEs… For instance in about three states the Bank has helped 120, 290 small holder farmers under the Anchor Borrowers Programme launched by President Muhammadu Buhari and creating more than 500,000 jobs,” Mohammed added.

The Minister of State-Petroleum, Dr Ibe Kachikwu said that the Council approved the change of funding configuration for Joint Venture Companies operating in the oil sector, to reap all cash call arrears that would in turn boost government’s revenue.

“The current upstream Joint Venture arrangement in the oil and gas industry is unincorporated Joint Venture (UJV) meaning that the Nigerian National Petroleum Corporation, NNPC and the International Oil Companies (IOCs) partner in each Joint Venture as unique and separate legal entities. While the NNPC pays the entire Oil and Gas revenues realised from the JV operations into the Federation account, the production costs are appropriated and paid monthly as Cash Calls to the JV operations from the NNPC and IOCs,” Dr Kachikwu stated.

He further said: “January – November 2016 underfunding of the NNPC Cash Calls is estimated at US$2.3 billion.  This is in addition to the inherited arrears estimated at USD$6.8 billion for year ending 2015. Under the new funding stream, the JVs would become incorporated and source for their own financing, freeing-up the government from the budgetary obligations of coming up with the cash calls already put at $2.3 billion so far, this year alone. Under the alternative funding regime, the technical cost of oil production in the country would also come down from about $27 per barrel to $18.”

The meeting was presided over by the Vice President Yemi Osinbajo. nec-meeting





Mercy Chukwudiebere