Business

Guardian angels in revenue generating agencies

Faced with persistent slump in conventional revenue sources, the Federal Government is shifting gaze to some government-owned entities by posting revenue directors to key agencies, Abdulwhahab Isa reports

Dim prospect in revenue sources Crude oil, with its multifaceted challenges, is losing its prime role as Nigeria’s main source of revenue. Prior to the outbreak of coronavirus pandemic, crude oil had begun to lose its status as Nigeria’s economic backbone. Given the fluctuating nature of crude oil price, its volatile and unsteady production quota, which comes at the behest of OPEC, Nigeria is reinforcing the process of harnessing the non-oil revenue sources to fund her expenditure as agriculture and mining sectors are rapidly being developed as best alternative to oil. However, outside of agriculture and solid mineral sectors, the Federal Government is shifting attention to some key revenue generating agencies as well. Before now, revenue generating agencies of government remitted what suited them into the Consolidated Revenue Fund Account as operation surplus. With the amendments introduced to Fiscal Responsibility Act, and the adoption of Treasury Single Account (TSA), two key finance reforms aimed at enhancing transparency and accountability across the ministries, departments and agencies of government, new era of managing finances in MDAs has been birthed.

Agencies as back bone

In 2018, the Federal Government launched the Strategic Revenue Growth Initiatives. The idea of strategic revenue initiative was expedient in the face of crumbling oil revenue. The Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, assisted by the Accountant General of the Federation AGF, Idris Ahmed, piloted the initiative. They spotted key revenue agencies of government with potential to maximally fund government’s budget expenditure. Research and studies revealed MDAs’ revenue strength profile. It showed that some Federal Government entities were gifted with capacity of improved revenue performance.

Targeted entities

In interim, and to experiment newly conceived Federal Government’s alternative revenue drive- SRGI, 10 revenue agencies were selected in the pilot stage. The big 10 captured in the pilot stage are the Nigerian National Petroleum Corporation (NNPC), Federal Inland Revenue Service, (FIRS), Nigeria Customs Service (NCS), Department of Petroleum Resources (DPR), Federal Airports Authority of Nigeria (FAAN), Corporate Affairs Commission (CAC), Nigerian Communications Commission (NCC), NIMSA, Nigeria Shippers’ Council and Nigerian Port Authority. However, going forward, government is determined to block every leakage identified in revenue channels of these 10 agencies earmarked in the pilot stage. Government wants maximum remittance ratio into Consolidated Revenue Fund Account.

Revenue directors to the rescue

Office of the Accountant General of the Federation (OAGF) is in charge of government’s finances.

The OAGF plays a vital role in managing the finances. Thus, the office has a near absolute control of posting of revenue personnel across MDAs. The office is central to the success of new revenue initiative – Strategic Revenue Growth Initiative (SRGI). The task of dispatching revenue directors to identified revenue agencies falls on its purview. Last week, the Office of Accountant General of Federation organised orientation workshop for directors of revenue. Ahmed and Idris were in attendance. In her Keynote address as special guest to declare open orientation workshop, Ahmed brought to the fore revenue challenges facing the government, and huge potential of revenue generating agencies. She said: “A recent study of the International Monetary Fund (IMF) revealed that the combined expenditures of the federal agencies exceeded the federal budget. It is in this light that the deployment of the treasury directors is considered expedient to selected FGOEs which will run as a pilot basis.” According to her, the deployment of directors of revenue to the FGOEs is in compliance with Presidential approval that was conveyed via Secretary to the Government of The Federation’s (SGF’s) circular reference SGF.50/S.3/C.9/24 dated 16t October, 2018 on the approved revenue performance management framework for FGOEs. “It is my considered opinion that the presence of directors of revenue at the FGOEs will ensure strict adherence to extant rules and regulations in the areas of compliance to approved budget and due process in procurement and expenditures payments,” she said. Ahmed also said that the directors of revenue, in the course of the discharge of their functions, shall be involved in the revenue operations of the FGOEs, have better understanding of business processes and operations of the FGOEs and cause improved transparency and accountability in revenue reporting by the FGOEs. In addition, they are, she said further, expected to seek for opportunities and avenues for revenue improvements which is the ultimate aim of the government. Speaking further, she said: “I am pleased to inform you that the discharge of these duties will be aided with the deployment of information technology. The integrated revenue monitoring system (IRMS) is being put in place to help the monitoring of the revenues of the FGOEs online realtime and to ensure improved transparency and accountability. “As professional treasury officers, you are the drivers of implementation of government policies. There is the need to continually evolve new ideas and be an effective and efficient bridge between the government and the citizenry. To ensure the success of this strategic initiative, it is important that we take the ownership of it. It is hoped that this will eventually promote and enhance service delivery. “This will also enhance the legal frameworks and provisions of the Fiscal Responsibility Act (FRA); understanding of the peculiarities of the FGOE’s revenue generating types; understanding the sources of federal account revenue, federal government independence revenue and your role and the role of the Office of the Accountant General of the Federation (OAGF) in revenue matters. Taking the ownership of the strategic initiative will also aid budgeting and collections procedure; opening and maintenance of new books, receipts and journals, among others.

On his part, Idris said the vision of the initiative was to achieve transparency and accountability of government revenue with special focus on FGOEs, improved revenue performance and ultimately to provide sustainable source of funding for government budget execution. He, therefore, urged the directors selected for the orientation to participate actively. “I hope that your passion and energy will be directed towards finding sustainable solution to the dwindling revenue profile the country is facing. At the point we are today, we all need to think outside the box and come up with implementation strategies that will have positive impact in transforming our nonoil revenue sources of financing the budget. “On your part as ambassadors of the treasury in the FGOEs, it is expected that you demonstrate highest level of professionalism and integrity in the discharge of this onerous task, consistent with the highest standard of service delivery,” he said. The Secretary to the Government of the Federation (SGF), Boss Mustapha, noted that the special orientation programme organised for Directors of Finance and Accounts could not have come at a better time than now. “It is public knowledge that the Federal Government of Nigeria and indeed the entire tiers of government have been witnessing a downward trend in revenue receipt since 2015. The issue has occupied the attention of government and in 2018 a Revenue performance management framework for Federal Government Owned Enterprises (FGOEs) was put in place and the president directed that my office issue a circular to guide implementation. “Among the decisions taken to boost the revenue base of government was to post professional treasury officers to select FGOEs to among others enable the treasury to have a better understanding of the business processes and operations of the FGOEs. This will help in the review of the current systems, Policies and procedures in revenue administration and management” “The policy is a reform initiative aimed at generating more revenue and associated remittance into the government treasury and to also improve the operational performance of all agencies. Hitherto, government has noted that a number of agencies remit less operating surpluses to the consolidated revenue fund than is required by law and/or financial regulations,” AGF reiterated.

Last line:

Posting professional revenue officers to agencies is crucial at a perilous period in Nigeria’s economy when Covid-19 squeezed conventional revenue sources open to the government. As guardian angels, revenue directors are to block revenue leakages across revenue generating agencies.

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