As the prolongation of the timeline for fuel subsidy removal opens a N3 trillion vacuum in the 2022 national budget, setting Nigeria up for more borrowing, the National Assembly has unveiled a plan to fill the vacuum.
The Nigerian Senate has said that it will be up to revenue-generating agencies of the Federal Government to generate the needed N3 trillion. The Senate president Ahmed Lawan said the agencies are capable of generating the sum annually if the resources are prudently spent.
Lawan said this on Monday, while declaring open an interactive session on the need to improve internally generated revenue of the Federal Government and Revenue Projections of the agencies as stipulated in the Appropriation Act 2022.
He explained that the meeting, which was between the Senate leadership, members of the Senate Committee on Finance led by Senator Solomon Adeola, and revenue-generating agencies of government, was to explore means of increasing government revenue.
Part of the aim of the Senate according to Lawan, is to strictly cut down on wastage while boosting revenue generation.
Lawan said the National Assembly would be rigid on ensuring increased revenue, cutting down on the country’s budget deficits, borrowing, and preventing wasteful expenditures by agencies of government. In addition, he said that the Senate would provide the needed support via legislation to ensure that revenue agencies meet and surpass their targets.
“In 2022, National Assembly assumed and rightly so, that our government-owned enterprises can generate up to N3 trillion if we are of the mindset that we can achieve that and, of course, ensure that we oversight to stall any possibility of unwarranted expenditures by agencies of government.
“But that does not mean in any way that it is going to be some kind of investigation on what you do, but an encouragement of what you need to do.
“In this meeting and subsequent ones, there should be no holds barred on discussions. Where an agency feels it is encumbered in any way from achieving its target, it should say so, so that we are able to prescribe the right solutions for it to perform.
“As a National Assembly, let me say that the Senate particularly will be stiff on generating more and more revenue.
“We will be rigid, we will continue to insist because we believe that this is one sure and guaranteed way of reducing our deficit and borrowing,’’ he said.
During the meeting, the height of infrastructural decay in the country was decried by Senator Adeola, who largely attributed it to budget deficit.
Lawan said the National Assembly will seize this opportunity to save the country from poor budget implementation by helping government agencies to enhance their revenue generation, thereby facilitating infrastructural development.
“This committee is modified because the leaders of the Senate believe that we can do far better and we have seen signs when last year some of the agencies performed beyond expectation.
“So, it is an opportunity for us to save and enhance our economy and, of course, make Nigeria achieve more infrastructural development which is the goal of this administration and every Nigerian.
“We believe that when you (revenue agencies) generate the money, we (National Assembly) appropriate it.
“Prudence is of essence here, when we spend our money. And when we borrow, like the National Assembly has always tried to do, we borrow to treat specific projects and programmes of government,’’ he said.
However, there is concern that the move will compound Nigeria’s inflation, currently at 15.63%. The major challenge with revenue-generating agencies in Nigeria is corruption. With many of the agencies riddled with cases of embezzlement and malfeasance, the onus is on the Senate getting them to be transparent in remitting generated revenue.
Nigerian agencies are required by extant law to remit 25% of generated revenue to the federation account. However, their sincerity in remitting their generated revenue has been under serious question. Late last year, the House of Representatives, during the 2022 budget defense by Ministries, Departments and Agencies (MDAs), rejected the budget proposals of many government agencies for failing to provide evidence of 25% remittance of their generated revenue into the federation account.
In 2021, the Nigerian Custom Service generated N2.3 trillion, which its 25% amounts to five hundred and seventy five billion. Although other MDAs may not have exerted the same vigor in their revenue generation, it is believed that if 25% of their collective generated revenue is sincerely remitted to the federation account, it will beat the target N3 trillion.
Therefore, the National Assembly is expected to focus on ensuring transparency in the MDAs. The concern remains that setting new revenue targets for government’s revenue-generating agencies will result in further hardship for Nigerians, since it will mean them imposing additional charges on services which will in turn reflect on the cost of goods and services.
Nigerians are currently grappling with 17.37% food inflation, and can’t afford the hardship that will emanate from further increment in the cost of goods and services.
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