Improving the performance of MDAs

The Minister of Finance, Mrs Zainab Ahmed, disclosed the plans last week in Abuja while reviewing the performance scorecards of the MDAs since the inception of the current administration. According to the minister, the review of Government owned Enterprises (GOEs) spending plans will henceforth be tracked by a more proactive revenue-tracking and monitoring mechanism. She also disclosed that a committee has been set up to work expeditiously to reconcile revenue data of these government enterprises from 1999 till date, on a monthly basis through digitalisation of all revenue collection and remittance processes.

The review plan is timely, especially now that government’s projected revenues have sharply declined, and key government enterprises under-remit revenues to the Federation Account. In 2018, government could only realise 50 percent of its total projected revenues. Last week, government put unremitted revenue surplus by MDAs at N2.7trn, with Petroleum Products Pricing Regulatory Agency (PPPRA) owing N1.3trn and Nigeria Ports Authority (NPA) N192bn in the category of government owned enterprises that defaulted in remitting operating surplus.

This trend must be reversed if government intends to meet its projected revenues as estimated in the 2019 budget, particularly with oil price now below the budget oil benchmark of $60 per barrel. From the report, the MDAs have grossly underperformed. It is in this regard that the Director General, Budget Office of the Federation, Mr Ben Akabueze, recently lamented that the MDAs have continued to shortchange the Federal Government in revenue remittances against the backdrop of the N40trn reported to have been disbursed to them over the years. This is unacceptable and must be reversed.

The report validates that of last year by the Auditor General of the Federation, Mr. Anthony Ayine, on the accounts of MDAs for the 2016 Financial Year. The report observed that “deficiencies were noted in the processes for consolidating the balances of MDAs into one economic entity.” The Auditor General’s report also excoriated the government owned enterprises for lack of full disclosures in line with General Acceptable Accounting Principles (GAAP). This is a key requirement for financial accountability and transparency. The Auditor General has done its part by performing a detailed and objective examination of public accounts and scrutinising expenditures of MDAs.

We, therefore, urge the Minister of Finance to ensure that the review of the expenditure plans of the MDAs improve their accountability and performance. Revenue generation and full remittances to the Consolidated Revenue Fund should, henceforth, be a priority. No longer should heads of MDAs defraud the government of revenues. However, the report shows that only a few of the GOEs declared surpluses in the 2018 financial year, raising concerns about their financial performances.

In line with Executive Order 2 of 2017, government owned enterprises are mandated to submit a three-year revenue and expenditure estimates. This is as provided in Sections 21 and 22 of the Fiscal Responsibility Commission (FRC) Act. It is important that they adhere strictly to this provision. The FRC Act stipulates that any government owned enterprise that generates revenue must remit 80 per cent to the Consolidated Revenue Fund. Based on that report, the Ministry of Finance promised to monitor their operations. In 2016, the Federal Government had threatened to prosecute 33 of its agencies over non-remittance of N450 bn said to have been generated between 2010 and 2015. But a committee recovered part of the money and remitted same to government Treasury Single Account (TSA). Government should put everything in place so that its agencies, especially the high revenue generating ones, should be held accountable.

We believe that it is for this reason that government recently announced plans to send treasury officers to these revenue generating enterprises to ensure transparency and accountability in their operations. Making the MDAs accountable will be of immense assistance in the implementation of the 2019 budget. No doubt, lack of performance of many MDAs has hampered the effective implementation of our budgets.

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