The Senate has warned that it would not entertain the 2022 expenditure profile of any Ministries, Department and Agencies without a corresponding revenue target.
Chairman Senate Committee on Finance who doubles as the Chairman of the Senate Joint Committee, Solomon Olamilekan Adeola dropped the hint on Friday during the presentation before the Senate Joint Committees on the 2022-2024 Medium-Term Expenditure Framework (MTEF) and Fiscal Strategy (FSP).
The Senator representing Lagos West said the National Assembly was deeply concerned about the debt profile of the present administration and called on the revenue-generating agencies to drop what he called frivolous expenditure.
He said: “We will remove any agency that fails to submit its proposed revenue target with the expenditure in the 2022 budget
“There is a public outcry that borrowings are on the high side. We are not saying that we are not going to borrow but we must reduce it. The only way to do this is to look inward and build our revenues.
“Many of the agencies that generate revenue spend them on frivolous expenditure.”
The Senate chairman expressed disappointment that most of the agencies that have been statutorily mandated by law to remit to the Consolidated Revenue Fund spend their earned revenues on frivolous expenditure.
He said: “There are three agencies of government: Those that are partly funded, those that are fully funded and those that are not funded at all.
“By law, if you are fully funded, every revenue generated must be paid to the Consolidated Revenue Fund. The government will give the recurrent expenditure, takes care of the personnel and at the same time, take care of the capital expenditure.
“Going forward, the government has succeeded that whatever partly funded and not funded agencies generate, 50 per cent of such revenue will go to the Federal Government.
“We are now going to 70-30. Only 30 will be released to the agency while the 70 goes to the CRF. We are going to amend the law again.
“If you are generating revenue and you are fully funded, everything accruing to you must go to the CRF. If you are partly funded or not funded at all, the law states that 80 per cent of the operational surplus must be paid to the CRF.
“We are hereby calling on the Minister of finance that there is the need to carry out a forensic audit into the expenditure of all agencies of government. This will curb frivolous expenditure and boost the country’s revenue base.
“Already we have realised N800bn from the independent revenues generated by the agencies so far this year, it used to be about N400m in the past. I am confident that we should be able to get up to N1.3trn by December.
“If we could manage to take it to N2.5 trillion in 2022, we would have taken care of one-fifth of the budget and we would not need to borrow.”
Dissatisfied with the submission of the Director-General of Nigeria Mining Cadastre Office, Engineer Obadiah Nkom, on revenue remittance, the Senate asked Minister of Mines and Steel Development, Olamilekan Adegbite to appear before it over poor regulation and loss of revenues in the sector.
The Director-General of Nigeria Mining Cadastre Office, had in his submissions before the joint committees said in 2019, N2.58billion revenue was generated and remitted to the Consolidated Revenue Fund ( CRF), which was reduced to N2.3billion in 2020 due to COVID-19 pandemic but already increasing in 2021 with N3.166billion realised as at July this year out of the targeted N4billion.
The Senate Joint Committee however said his team was not impressed, listing high profile companies engaged in the sector.
“Your submissions on revenue generation is low and not impressive at all because big companies like Dangote Cement, BUA etc, with combined yearly profits of about N5trillion are under your purview.”
“These are aside other companies carrying out illegal mining activities across the country that are not captured in your revenue generation.
“A lot of Chinese are involved in illegal mining in the country without your agency or any other one saddled with the regulation of the sector, doing anything as far as licensing them and monitoring their explorations in form of a collection of royalties are concerned.”
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