The representatives also resolved to probe revenue-generating agencies for non-remittance of funds to government coffers and other revenue leakages as provided in the Fiscal Responsibility Act, 2007.
The House of Representatives has proposed punitive measures against Ministries, Departments and Agencies (MDAs) of the government that are in clear contravention of the Fiscal Responsibility Act (FRA), 2007.
Specifically, the House decried the non-remittance of operating surpluses into the federation account by the Nigeria National Petroleum Company Limited (NNPCL) due to what the company calls under-recovery payments and a claim that the federating units owed it the sum of N10 trillion.
To address these revenue leakages, the House has resolved to convene a quarterly investigative hearing with revenue generating agencies to track their compliance with the FRA.
These and other recommendations were adopted at last Wednesday’s plenary session during the consideration of the report of the House joint committee on finance, national planning and economic development on the 2025–2027 Medium-Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP). The fiscal planning proposals were submitted to both chambers of the national assemby by President Bola Tinubu penultimate week.
NNPCL’s 10 trillion naira subsidy claim
The joint committee report noted that petrol subsidies continue to have a significant adverse impact on oil revenues due to the federation. It particularly frowned at the claim of the NNPCL that it spent a whopping 10 trillion naira to cater for under-recovery (subsidy) payments. A
Accordingly, the joint committee recommended that the committees on petroleum upstream, and petroleum downstream should investigate the claim and reports from the Revenue Mobilization, Allocation, and Fiscal Commission (RMAFC) and the Fiscal Responsibility Commission (FRC) alleging that “the NNPC withheld ₦8.48 trillion as claimed subsidies for petrol.”
The committee said “the investigation will address the NEITI report stating that NNPC failed to remit $2 billion (₦3.6 trillion) in taxes to the Federal Government. The committees are further directed to verify the total cumulative amount of unremitted revenue (under-recovery) from the sale of Premium Motor Spirit (PMS) by the NNPC between 2020 and 2023.”
Exchange rate fluctuations and the rising cost of importing Premium Motor Spirit (PMS) have continued to strain government revenues, raising questions about the sustainability of the partial subsidy framework. There are growing concerns by Nigerians as well as the national assembly over the fiscal impact of subsidy payments on the federation account.
Damning verdict on revenue leakages
The committee’s finding also revealed that, “the Federal Government Ministries Departments and Agencies (MDAs) as well as the Government Owned Enterprises (GOEs) are not complying with the financial reporting standards; most revenue generating agencies violate the Fiscal Responsibility Act due to the lack of punitive provisions in the Act; historical non-remittance of operating surpluses into the Federation Account by the NNPCL due to what it called under recovery with the claim that the federating units owed it the sum of Ten Trillion Naira;).”
OrderPaper’s advocacy on strengthening the FRA
OrderPaper Advocacy Initiative has been at the forefront of advocating to strengthen fiscal policies and address concerns related to accountability, prudent management of funds and Nigeria’s growing debt burden.
The move to combat corruption, block revenue leakages and eliminate wastage of public resources by MDAs of government has become imperative. It however points to the fact that most revenue generating agencies violate the Fiscal Responsibility Act due to the lack of punitive provisions in the Act.
The advocacy has led to the consideration of an FRA amendment bill to compel MDAs to make remittances as at when due. The proposed piece of legislation is titled “A Bill For An Act To Repeal The Fiscal Responsibility Act, No.31 Of 2007 And To Enact The Fiscal Responsibility Act, 2024 To Provide For Prudent Management Of The Nation’s Resources; Ensure Long Term Macro-Economic Stability Of The National Economy; Secure Greater Accountability And Transparency In Fiscal Operations within The Medium Term Fiscal Policy Framework; And The Establishment Of The Fiscal Responsibility Commission To Ensure The Promotion And Enforcement Of The Nation’s Economic Objective; And For Related Matters.“
It is sponsored by the Deputy Speaker of the House of Representatives, Rep. Benjamin Kalu, and the other co-sponsors are the Majority Leader, Julius Ihonvbere, Mansur Manu Soro, Lawan Ali Shetima, Ikeagwuonu Ugochinyere, Joshua Audu Gana and Akiolu M. Kayode. The bill has been consolidated with six other similar bills on October 3, 2024.
The essence is to repeal the Fiscal Responsibility Act of 2007 and re-enact a new Fiscal Responsibility Act, 2024. Rep. Marcus Onobun in his lead debate said the FRA, 2007 which has been in operation for more than one half decade and has been found to contain certain loopholes and weaknesses. This which he said has hampered effective efficient operation and smooth achievement of its intendment.
He also disclosed, “The consolidated Bills which seek to amend the Fiscal Responsibility Act, No. 31 of 2007 on one hand and also to repeal the Fiscal Responsibility Act, No. 31 of 2007 and to enact the Fiscal Responsibility Act, 2024 to provide for prudent management of the nation’s resources; ensure long term macro-economic stability of the nation’s economy; secure greater accountability and transparency in fiscal operations within the medium term fiscal policy framework; and the establishment of the Fiscal Responsibility Commission to ensure the promotion and enforcement of the nation’s economic objectives. These Bills were read the first time, in this hallowed chamber on different days.”
