Responding to the plan, the Manufacturers Association of Nigeria described the proposal as a dangerous move that would not only reduce the already low Foreign Direct Investments into the country but also make regulatory agencies to overburden businesses for funds.
MAN’s Acting Director-General, Ambrose Oruche, told one of our correspondents on Friday, “It is a dangerous move. The business community will suffer for it. The government should not try it because the businesses pay taxes for running the government. If this proposal is implemented, I don’t see investors staying in this economy.’’
While noting that such would impair the gains of the Ease of Doing Business policy, he added, “It then means that the agencies will be all out to make money from the business community since they are the ones sourcing for their revenue. Businesses will shut down and unemployment will rise.”
The Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture also described the plan as a wrong move, saying the Senate should rather engage the agencies in useful dialogue to achieve the desired goal.
The Director-General NACCIMA, Ambassador Ayo Olukanni, said, “The Senate should not go this way. Such move may in fact sound their death knell. It should rather look for more innovative ways to encourage these agencies to make them more productive and generate revenue.
“If properly funded, they (the agencies) can be challenged to generate revenue, using various innovative business models in collaboration with the private sector with effective supervision.”
Also, a Professor of Economics at the Olabisi Onabanjo University, Sheriffdeen Tella, said he did not agree with the Senate proposal because it would make agencies independent of the federation account and their revenue and expenditure would be difficult to monitor.
He said, “All the money that is generated ought to go into the federation account. In that case, there is supposed to be budgetary allocations for all the agencies. They must have their own budget and they must not spend beyond the money they budgeted for.
“You cannot ask them not to be part of the budgetary system. This is so that we can track how much goes in and goes out. If you say they should spend as they generate, it means they are going to be independent of the federation account which is not good enough.”
According to an economist, Dr Ayo Teriba, if all revenues go into the government’s purse before the money is shared, it curtails excesses and leakages, noting that allowing agencies to spend their revenue and only remit a certain portion would be an aberration. ‘‘This is one of the reasons why Nigeria is poor,” he added.
Teriba, who is the Chief Executive Officer, Economic Associates, stated, “The country has moved towards a Treasury Single Account. The question to ask is; are the federal agencies the Senate is referring to part of the TSA or not? They are.
“Two, what is beneficial – to have a central budgeting system for all the agencies or to take some of them out to run individual budgeting system? It undermines accountability and I don’t know any other country in the world where any revenue generating agency has the autonomy to spend the revenue it collects.’’
LCCI, economist back move
However, the Director-General, Lagos Chamber of Commerce and Industry, Dr Muda Yusuf, backed the plan, but cautioned that there should be proper monitoring to ensure accountability and prevent reckless spending.
He added, “There has to be a proper assessment to know the ones that have the capacity to generate revenue and fund themselves. So, if they have enough capacity to generate funds, why not, and the cost they incur must be realistic because some of them have bloated cost of operations.
“Some of them are really robust in terms of the revenue they generate, but we must carry out proper monitoring of what they generate.”
Also, a Professor of Economics at the Obafemi Awolowo University, Ile-Ife, Osun State, Abayomi Adebayo, welcomed the development, saying it was long overdue.
“I think we are thinking right. Under the pretence that the income generated in those agencies are low, they keep using the revenues to enrich themselves as we have seen in many investigations carried out, whereby you see some of their directors strikingly rich while the government is getting poorer.
He said, “For instance, look at Customs, how can they be collecting subventions from the government considering how much they generate?”
Addressing the concern in some quarters that the affected agencies might be pressurised to generate funds by way of taxing the people more, Adebayo said, “It is nothing to worry about. There are principles that will govern any agency to regulate taxation. But I think anybody who can’t run such agencies should please resign to give room for people who can run them profitably.”
