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Published On: Wed, Dec 19th, 2018

Budget: FG’s N40trn Investment in GOEs not yielding results

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Despite the over N40 trillion the Federal Government has invested in Government Owned Enterprises (GOEs) over the years, what is usually remitted to the treasury in terms of dividend or surplus at the end of each operating year is mostly insignificant.
The Director General of the Budget office of the Federation, Mr Ben Akabueze disclosed this in a town hall meeting with Chief Executive officers of government owned agencies on Tuesday in Abuja. “The record shows that few of the GOEs declare surpluses. In effect, the Nigerian tax payers and the general public have not benefited much from these investments’ agencies”, Akabueze said.
He noted that out of the total projected sum of N807.57bn independent revenues in 2017, only N216.66 billion, representing 26.8% performance, was remitted by GOEs and revenue generating MDAs, stressing that remittances and collections by Government agencies should contribute more significantly to federal government’s revenue.
Speaking on the fiscal year 2017, and between Jan – Sept 2018 budget, he said the performance clearly reveal that government has a serious revenue challenge.
The development is coming just as he said that dwindling revenue challenge was attributed to failure of these agencies to comply with Executive Order 2 recently issued from the presidency.
He said as part of efforts to address the revenue challenge include the deployment of new and improved technology to increase revenue collection, upward review of tariffs and tax rates where appropriate, stronger enforcement action against tax defaulters, and tighter Performance Management Framework for Government Owned Enterprises (SOEs) among others.
He said that a critical element of the Economic Recovery and Growth Plan (ERGP) was the enhancement of domestic revenue mobilization (DRM).
This, according to the Budget boss, would be attained by improvements in both tax policies and collection, as well as significant turnaround in the performance of Government Owned Enterprises (GOEs).
He regretted that the continuous underperformance of the GOEs has made it difficult to achieve enhanced domestic revenue mobilization from operating surpluses of the GOEs.
He revealed that it was these concerns about financial performance of GOEs that gave rise to Executive Order 2 of 2017 and the circular ref SGF.50/S.3/C.9.
Mr Akabueze said the Executive Order 2 of 2017 mandates Government owned Enterprises (GOEs) to submit 3-year Revenue and Expenditure Estimates & Annual Budget Estimates to accompany the FGN Budget proposals to the Federal Ministry of Finance (FMF) and the Budget Office of the Federation(BOF) for review and verification.

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