The Chairman, House Committee on Finance, Abdulmumin Jibrin on Thursday addressed issues of revenue generation, state of the economy and the non-remittance of funds by some government agencies to the Federation Account (FAAC), adding that the House is working to find a permanent solution to the issues.
Mr Jibrin was guest on Channels Television’s business programme, Business Morning.
Analysts have blamed the law in place which states that the government agencies should remit about 80% of their operating surplus into the consolidated revenue fund despite the fact that there is no clear cut definition of what an ‘operating surplus is.’
Asked if the surplus is calculated by the accounting profit or excess over income expenditure that is prepared under accrual accounting or the excess of inflow over outflow under the cash accounting system practiced in the ministries, Mr Jibrin said the 80 percent of the total revenue generated after expenditure is removed is what agencies are expected to remit.
“The law is trying to indicate to this agencies that the total amount of income they generate, perhaps internally generated revenue, when they take away their expenditure, what is left (which we call surplus), they should pay 80 percent of the surplus to the Federal Government.”
He added that the major challenge is that most of these agencies overblow their expenditure which makes it difficult to have any surplus to remit.
He noted that the Committee is working to ensure compliance to the rule as well as examine expenditures to ensure that “there is no junk.”
“One other thing we are trying to do is to amend the law. Rather than rely on operating surplus, we are trying to ensure that they remit a gross, so some agencies will be remitting 100 percent of their gross income, some 25 percent while some would be retained under the category of operating surplus.”
On the amendment of the Fiscal Responsibility Act of 2007, Mr Jibrin noted that the Committee seeks to amend the schedule which contains a list of all agencies expected to remit. He highlighted the issue as the diverse ways in which all the agencies operate. Hence, “you cannot put a law that applies to all of them at the same time.”
“We discovered that rather than put a straitjacket remittance figure, we have to put them into categories.”
He added that discussions have been had with the Ministry of Finance which would help in the categorization process as the ministry deals with the agencies more often. “We are waiting for the ministry to send in this categorization, so that we can compare with the ones we have and be able to attach it to the schedule and send the amendment to the floor of the House.”
He also spoke on the disagreement between the House and the Executive over the Oil bench mark which the Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) put at 74 dollars per barrel while the House pegged it at 79 dollars and finally both parties agreed on 77.5 dollars which analysts have termed unrealistic.
He stated that “sometimes, perception comes to play when issues like this are dealt with” as members of the executive arm and particularly technocrats, think the lawmakers have limited knowledge.
On the issue of NNPC’s alleged non-remittance of funds to the FAAC, Mr Jibin disclosed that he had two separate meetings with the Governor of Central Bank of Nigeria, before he appeared before the Senate but the “Sanusi I saw talking before the Senate was not the Sanusi that spoke to me 5 days before that day and a day before he appeared in the Senate.”
He added that “perhaps in the future, when he (Sanusi) is writing his memo, he’ll be able to tell Nigerians a lot of things that he has shared with us in private.”