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FG restricts MDAs expenditure to half of revenues generated

Henceforth, Ministries, departments and agencies (MDA) are to limit their expenditure to half of the revenue they generate, even as the Federal Government threatened possible sanctions against Government-Owned Enterprises (GOEs) that fail to meet their revenue targets.

This comes amid a growing revenue crisis being experienced by the government, leading to constant borrowings to fund its recurrent and capital expenditure.

Minister of Finance, Budget and National Planning, Zainab Ahmed, made this disclosure at the Public Presentation and Breakdown of the Highlights of the 2022 Appropriation Bill, in Abuja, on Friday.

Top on the list of analysts’ concerns around the N16.39trillion National Budget, is where the money to fund the proposals will come from.

These agencies cannot spend more than 50 per cent of what they generate. And this is major revenue that would be coming into the government’s treasury.

Ahmed explained that the move is in effort to boost the revenue performance and remittance of the enterprises. “We are working to ensure that MDAs appropriately account for and remit their internally generated revenues.”

She continued: “GOEs’ revenue performance/remittance will be enhanced through effective implementation of the enhanced performance management framework, including possible sanctions should they default on their targets; tighter expenditure control including enforcing of Finance Act 2020 provision limiting GOEs cost-to-revenue ratio to maximum of 50 per cent; and regular independent monitoring and reporting of revenue and expenditure performance of GOEs by both the Budget Office of the Federation, and the Office of the Accountant General of the Federation.

“These agencies cannot spend more than 50 per cent of what they generate. And this is major revenue that would be coming into the government’s treasury.’’

According to the Minister, the government has put in place a robust monitoring mechanism to help assess the performance of agencies, adding that the plan to sanction them for revenue shortfalls would be included in the Finance Act 2021 or as a directive from President Muhammadu Buhari.

She said: “We have some provisions that we hope to make in the Finance Act that we are currently working on. But in addition to that, we also have a robust monitoring mechanism that is regular and continuous and tracking the performance and alerting these agencies where they are already falling short. A long time ago, people just worked and tracking was not done; by the time you make an assessment and underperformance is reported, it is already late.”

She added that continuous monthly reconciliation was being done with the revenue generating agencies.

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