….threatens zero budget allocation for non- performing agencies
….fixes N15bn revenue target for NMCO
The Senate Joint Committee on Finance, National Planning, Gas Resources, Petroleum Upstream and Downstream, on Friday, summoned the Minister of Mines and Steel Development, Olamilekan Adegbite over alleged poor regulation and loss of revenues in the sector.
The Committee also fixed N15billion as revenue target for the Nigeria Mining Cadastre Office (NMCO) in 2022 as against N4billion proposed by the agency.
The committee threatened zero budgetary allocation for any revenue-generating agency of the Federal Government without clear cut revenue profile or targets in the 2022 fiscal year.
The committee summoned the Minister of Mines and Steel Development as a result of the seeming inability of the Director-General of NMCO, Engineer Obadiah Nkom, to explain the reason for low revenues allegedly being generated in the sector and the menace of illegal mining across the country.
Nkom had in his presentation before the committee said in 2019, N2.58billion revenue was generated and remitted to the Consolidated Revenue Fund (CRF).
He said the amount generated however dropped to N2.3billion in 2020 due to COVID-19 pandemic.
However, he said that 2021 has already witnessed an increase in revenue with N3.166billion realised as of July this year out of the N4billion target.
Chairman of the Committee, Senator Olamilekan Adeola, and other lawmakers expressed surprise that such an agency could not generate revenue beyond the threshold of four to five billion.
Adeola said: “Your submissions on revenue generation is low and not impressive at all because big companies like Dangote Cement, BUA, etc, with combined yearly profits of about N5trillion are under your purview.
“These are aside other companies carrying out illegal mining activities across the country that are not captured in your revenue generation.
“A lot of Chinese are involved in illegal mining in the country without your agency or any other one saddled with regulation of the sector, doing anything as far as licensing them and monitoring their explorations in form of collection of royalties is concerned.”
But the Director-General in his response said the mandate of his office is only to licence firms and not the collection of royalties or monitoring of illegal miners or mining.
“Our revenue is strictly generated from licensing and annual service fees collected from firms. Royalties and illegal mining are not under my purview and I cannot dabble into them,” Nkom said.
Apparently angered by this assertion, the Commitee Chairman in agreement with the members, directed the Clerk of the committee to invite the Minister of Mines and Steel Development for required interface on way out of the problem in the sector, particularly as regards illegal mining and low revenue generation.
“The Minister will have to appear before this committee for required interface on the way out of the problem in the sector.
“As for the Mining Cadastre Office, N15billion is now fixed as targeted revenue generation for the year 2022, because you have the capacity of meeting up with that as against four of five billion Naira you are proposing,” he said.
He added that in stopping the yearly budget of the country from being funded by borrowings, the Finance Act will be amended to make agencies fully funded by the government to remit 100 percent of their revenues into the Consolidated Revenue Fund and 80 percent for those partly funded.
Adeola added: “We will remove any agency that fails to submit its proposed revenue target with the expenditure in the 2022 budget. They will get zero allocation.
“There is a public outcry that borrowings are on the high side. We are not saying that we are not going to borrow but we must reduce it. The only way to do things is to look inward and build our revenues.
“Many of the agencies that generate revenue spend them on frivolous expenditure. There are three agencies of government – those that are partly funded, those that are fully funded, and those that are not funded at all.
“By law, if you are fully funded, every revenue generated must be paid to the consolidated revenue fund. The government will give the recurrent expenditure, takes care of the personal, and at the same time, take care of the capital expenditure.”
“Going forward, the government has decided that whatever partly funded and not funded agencies generate, 50 percent of such revenue will go to the Federal Government.
“We are now going to 70-30. Only 30 will be released to the agency while the 70 goes to the CRF. We are going to amend the law again.
“If you are generating revenue and you are fully funded, everything accruing to you must go to the CRF. If you are partly funded or not funded at all, the law states that 80 percent of the operational surplus must be paid to the CRF.
“We are hereby calling on the Minister of Finance that there is the need to carry out a forensic audit into the expenditure of all agencies of government. This will curb frivolous expenditure and boost the country’s revenue base.
“Already we have realised N800billion from the independent revenues generated by the agencies so far this year, it used to be about N400million in the past. I am confident that we should be able to get up to N1.3trillion by December.
“If we could manage to take it to N2.5trillion in 2022, we would have taken care of one-fifth of the budget and we would not need to borrow.”
