2025 budget: Senate threatens zero allocation to MDAs over non-appearance
The Senate has threatened federal ministries, departments, agencies, and MDAs with zero allocation in the 2025 fiscal year if they do not come before it to audit expenditure records from 2024 appropriations.
The study also criticised discrepancies in Nigeria’s income generating and spending monitoring, calling for greater coordination between the Office of the Accountant General of the Federation and the legislative body.
Senator Sani Musa led the Senate Committee on Finance, which convened an investigation session yesterday, during which senators highlighted these and other problems. The hearing concentrated on the remittance of internally produced money, fiscal responsibility, and the general health of the country’s financial management system.
Members of the committee who spoke during the session with the Accountant General of the Federation, Oluwatoyin Madein, and her team, criticised the amount of inconsistency found in several of the agencies’ record books.
In his introductory remarks, Senator Musa emphasised the necessity of correcting financial irregularities among government institutions, claiming that these challenges hinder governance openness and accountability.
He specifically cautioned that any agency that fails to come before the committee risks receiving no funding for the fiscal year 2025.
“This performance index study on multiple MDAs is a precursor to the 2025 budget. He warned that failing to come before this committee upon invitation may result in a zero allocation in the 2025 budget, as the committee demands factual and numerical records of the 2024 appropriations.
The lawmaker, who noted the inability to easily access accurate data on the federation’s funds, a gap that impedes effective oversight and policymaking, stated: “We should be able to determine, at any point, the exact state of revenues collected, how they’ve been disposed of, and what’s been allocated to various accounts. Unfortunately, this is not the present situation.
Key areas of concern include disparities between reports from the Nigerian National Petroleum Company Limited (NNPCL) and the federation account, dividends from LNG operations, and other substantial differences.
The committee also emphasised the importance of transparency regarding government-managed loans, grants, and other financial outflows.
Prior to the threat, the Accountant General of the Federation gave a summary of domestically produced money for the federal government until September 2024; she claimed a N8 billion capital allocation for 2024, but only N2.9 billion (25%) had been released for project execution.
The parliamentarians remarked that the approach of centralising all payments in the accountant general’s office caused bureaucratic bottlenecks, and the unutilised money hindered other agencies from receiving critical resources, compounding overall delays.
They pointed out that this method frequently left MDAs waiting months for payment after projects were completed, causing delays in government operations and public initiatives.
Contractors were required to pay under-the-table fees, reportedly 5% of the contract value, to accelerate their payments, which generated additional suspicions.
The stated results comprised independent revenue of N2.7 trillion, an operational surplus of N2.3 trillion from government-owned businesses (GOEs), and N344 billion in revenue generated internally by ministries, departments, and agencies (MDAs).
However, the committee remarked that the presented report was mainly focused on the Accountant General’s Office, with considerable gaps in the federal government’s broader financial activity.
Following the identification of gaps, the committee decided to convene a joint session with other relevant agencies, including the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), the Nigerian Extractive Industries Transparency Initiative (NEITI), and NNPCL, to conduct a thorough review of the discrepancies.
To guarantee report clarity and uniformity, all stakeholders must be present at once.
“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.
Other committee members, including the chairman, voiced profound irritation with the continued delays in the delivery and use of capital funds, citing inefficiencies in the Federation’s centralised payment system.
They criticised the centralised payment strategy, which mandates over 700 ministries, departments, and agencies (MDAs) to route payments via a single office.
According to MPs, the approach has resulted in inefficiencies, project delays, and a loss of public trust, particularly in communities that rely on key infrastructure projects.
Contractors were required to pay under-the-table fees, reportedly 5% of the contract value, to accelerate their payments, which generated additional suspicions.
According to them, if proven, this behaviour would pose a significant accountability concern, compromising the system’s efficiency.
The Accountant General disclosed that stamp duty collections from 2020 to 2024 were disappointingly low, reaching ¦30.3 million, compared to ¦301.49 million in internally generated revenue (IGR).
Lawmakers attributed this to poor budget performance, as taxes are only collected when payments are received.
In her defence, the accountant-general claimed that the centralised payment system was implemented to reduce inefficiencies and prevent excess monies from being carried over annually.
At the conclusion of the day, the committee set a follow-up meeting at 2 p.m. the same day and gave the accountant-general till tomorrow to provide all needed reports.
Members also stated that they planned to contact other groups, such as the Nigerian National Petroleum Company Limited (NNPCL) and the Nigerian Extractive Industries Transparency Initiative (NEITI), to clarify issues with their contributions. They pushed on giving MDAs more autonomy in managing their finances while yet providing oversight to prevent misuse.
Senator Amos Yohanna of Adamawa North summarised the situation, saying, “Poor budget performance is causing a decline in federal government revenue.” The absence of payments keeps taxes low. “We need a working system.”
The committee wanted solutions to the basic issue that causes financing delays, including for uploaded, finished projects.
We requested the accountant-general to describe the obstacles in detail and provide alternatives.
The Senate is set to debate whether to change or eliminate the central payment system, ensuring that Nigeria’s budget execution satisfies citizens’ demands and promotes growth.