Senate threatens Federal MDAs with zero allocation for 2025 over failure to appear for scrutiny

The Nigerian Senate has issued a stern warning to ministries, departments, agencies (MDAs), and other federal government bodies, threatening them with zero allocation in the 2025 fiscal year if they fail to appear before the Senate Committee on Finance to provide records of expenditures from 2024 appropriations.

During an investigative hearing led by Senator Sani Musa, the committee raised concerns over discrepancies in the country’s revenue generation and expenditure tracking. The session focused on the remittance of internally generated revenue, fiscal accountability, and the state of Nigeria’s financial management system.

Senators criticized the discrepancies found in the records of some agencies and called for improved coordination between the Office of the Accountant General of the Federation and the legislative body to ensure transparency and accountability.

“This performance index exercise on the various MDAs is preparatory to the 2025 budget. Any agency that failed to appear before this committee upon invitation risks zero allocation in the 2025 budget because records of how appropriations made for 2024 are expended must be provided with facts and figures,’’ he said.

The lawmaker, who noted the inability to readily access accurate data on the funds available to the federation, a gap that impairs effective oversight and policymaking, said: “We should be able to determine, at any point, the exact state of revenues collected, how they’ve been disposed off, and what has been allocated to various accounts. Unfortunately, that is not the case today.”.

Key areas of concern include the discrepancies in reports from the Nigerian National Petroleum Company Limited, NNPCL and the federation account, the dividends received from LNG operations, and other significant variances.

The committee also underscored the need for clarity on loans, grants, and other financial inflows managed by the government.

The Accountant General of the Federation had before the threat, presented a summary of internally generated revenue for the federal government up to September 2024 as she reported an N8 billion capital allocation for 2024, yet only N2.9 billion (25%) had been released for project execution.

Lawmakers noted that the unutilized funds obstructed other agencies from accessing necessary resources, further exacerbating delays across the board and policy of centralizing all payments in the Accountant General’s office was heavily criticized for creating bureaucratic bottlenecks.

They pointed out that this system often resulted in MDAs waiting months for payment after projects had been executed, causing delays in government operations and public projects.

Concerns were also raised about contractors being required to pay under-the-table fees, reportedly 5% of the contract value, to expedite their payments.

The reported figures included independent revenue of N2.7 trillion; operating surplus from government-owned enterprises, GOEs, amounting to N2.3 trillion; and ministries, departments and agencies’, MDA, internally generated revenue of N344 billion.

However, the committee noted that the submitted report focused solely on the Accountant General’s Office, with significant omissions regarding the federal government’s overall financial activities.

Following the gaps identified, the committee resolved to invite other relevant agencies, including the Revenue Mobilization Allocation and Fiscal Commission, RMAFC, the Nigerian Extractive Industries Transparency Initiative, NEITI, and the NNPCL, for a joint session to ensure a comprehensive review of the discrepancies.

“This is not about hearing from one side and another separately; we need all stakeholders present at the same time to provide clarity and consistency in their reports.

“The Senate hearing reflects growing efforts to strengthen Nigeria’s financial oversight and accountability mechanisms, with a shared commitment to enhancing transparency and building a robust fiscal policy framework,” Senator Sani said.

Besides the chairman, other members of the committee expressed deep frustration over the persistent delays in the release and utilization of capital budgets, citing inefficiencies within the centralized payment system managed by the Office of the Accountant General of the Federation.

They criticized the centralized payment policy which requires over 700 ministries, departments and agencies, MDAs, to process payments through a single office.

According to the lawmakers, the policy has led to inefficiencies, delayed project completion, and diminished public trust, especially in constituencies expecting the execution of critical infrastructure projects.

Concerns were also raised about contractors being required to pay under-the-table fees, reportedly 5% of the contract value, to expedite their payments.

This practice, if verified, according to them, represented a major accountability issue, undermining the efficiency of the system.

The Accountant General revealed that stamp duty revenues from 2020 to 2024 were disappointingly low, totaling ¦ 30.3 million, compared to the ¦ 301.49 million internally generated revenue, IGR.

Lawmakers linked this to poor budget performance, as taxes are only collected when payments are made.
The accountant-general in her defence, explained that the centralized payment system was introduced to curb inefficiencies and prevent unutilized funds from being rolled over annually.

At the end of the day, the committee gave the accountant-general till tomorrow to provide all requested reports, ahead of a follow-up meeting scheduled for 2pm the same day.

Members also indicated plans to summon other agencies, including the Nigerian National Petroleum Company Limited, NNPCL, and the Nigerian Extractive Industries Transparency Initiative, NEITI, to address discrepancies in their submissions, even as they insisted that MDAs should be given greater autonomy to manage their budgets while maintaining oversight to prevent misuse.

On his part, Senator Amos Yohanna, Adamawa North, who summarized the issue, said: “Federal government revenue is suffering because budget performance is poor. Taxes remain low because payments are not made. We need a system that works.”

The committee demanded answers to the core issue, which is why funds are delayed, even for uploaded, completed projects?

The accountant-general was asked to provide a detailed explanation of the bottlenecks and propose solutions.

The Senate is expected to deliberate on whether to reform or abolish the centralized payment system, ensuring that Nigeria’s budget implementation meets the needs of its citizens and fosters development.