November 16, 2015by Tope Fasua0

It is yet in the realm of rumours. But it s doable. And if it is done, it would perhaps be a masterstroke for this administration. One of Buhari’s adversaries criticized the possibility of Nigeria doubling its budget by implementing an N8Trillion war-chest next year. He asked if we had put in place as president, a ‘Professor Peller’ (that famous Nigerian magician). I believe he is not too far from the truth. But in a positive way, Buhari may just conjure up a rabbit from his long top hat with this upcoming proposal. Some people say he looks the part of a magician; tall, slim, with a broody look and a mysterious demeanour, preferring to speak little if at all. A popular columnist described Buhari as a chess master last week.

Why may Buhari successfully pull off this hat-trick?

First of all, Nigeria has the money to budget that much. Secondly, the leakages are being blocked. Thirdly, Nigeria’s budget has always been so small compared with its capacity, its GDP levels, its revenue potentials and most importantly perhaps, compared with all its neighbours. This is a matter closely linked with the concept of Fiscal Productivity – a concept defined by a scholar and friend, Dr N. N Susungi, as the ratio of a country’s tax revenue to its GDP. Nigeria has the lowest ratio in the world. The country just budgets what amounts to peanuts each year, compared with its GDP, or its real earnings. We shall explain this below.


On the 8th of February this year, in the heat of politicking for the presidential elections, I had cause to publish an article titled; So Who Stole Nigeria’s Trillions? See http://dailytrust.com.ng/…/19549-so-who-stole-nigeria-s…. It was on the back of serious allegations levied by the former CBN Governor, now Emir Muhammadu Sanusi II, to the effect that some $20billion was missing from the coffers of the nation. Another cerebral gentleman, Professor Charles Soludo, had weighed in and probably stepped up the heat, that Nigeria had lost about N30Trillion to mismanagement, fraud and embezzlement within a four years period. Because these two men had managed the nation’s finances at a very high level, I naturally took them serious and examined what exactly they were trying to say; especially Soludo’s fantastic intervention.

Around the same time, the Federal Inland Revenue Service (FIRS) announced its performance for the year 2014, which was N4.69Trillion. See http://www.thisdaylive.com/…/firs-generates-n4…/200484/. The entire federal budget for the year 2014 was N4.695Trillion, which was almost exactly what the FIRS collected, even though FIRS collection gets shared among three tiers of government. The government of the day explained that its entire revenue was N10Trillion, N3.73Trillion of which was due to the Federal Government while the balance was shared to other tiers of government. For the year 2014, the federal government had a total revenue of N3.73Trillion but spent N4.695, thereby incurring a deficit of almost N900billion which had to be financed through borrowing.

The question reared its head as to whether FIRS generated almost 50% of the nations total revenue. This couldn’t be so, given that Nigeria parades hundreds of revenue-generating departments and agencies, which represented it in almost every facets of our lives. What was happening to those monies? What was happening to funds generated by NNPC, NPA, NIMASA, FAAN, NCAA, Nigerian Customs, Nigerian Immigrations and many more? As a matter of fact, for that same year 2014, the Customs projected a revenue of N2Trillion but managed an Actual of N977billion. See http://sunnewsonline.com/…/customs-generates-n977-09bn…/.

So for 2014, between the FIRS and Customs, a total revenue of N5.6Trillion was generated. If Nigeria could file in what the other large agencies had done, Nigeria could potentially be a N20 – N30Trillion revenue country and thus this Buhari magic may be easier than we think. Nigerians realized early this year that our federal government was seriously under-budgeting and that many revenue items were flying under the peoples’ radars. What was more, there were many extra-budgetary transactions, including the now-famous ‘service-wide’ votes from which trillions of naira is spent yearly at the discretion of the president.

Before I go on, it should be noticed that the FIRS performance is hampered by:

  1. Fraud – there are syndicates run by Nigerians whose stock in trade is to waylay tax deduction cheques and divert through sundry third party accounts. E-banking has reduced but not totally eradicated this.
  2. Tax evasion – it is still said that Nigerians don’t pay taxes. And that is true, with top earners and heavy cash movers being the biggest culprits. There are several schemes devised by the government to extract their taxes anyway; such as VAT, Withholding Tax, Education Tax and so on. But Nigerians aren’t paying more than half what we should. If played right, and with sincerity and performance, FIRS collections could be bumped up another 100% to say N8Trillion.
  3. Waivers – Under the last regime, this became a scandal, as oil companies got tax rebates, while importers of luxury goods got import duty waivers because of their closeness to government.

The Nigerian Customs Service too, could have done much better but for the usual problem of corruption and waivers from high places.

As for NNPC, which oversaw the production of 2.5million crude oil barrels per day for Nigeria, albeit under Joint Venture or Production Sharing Agreements, the story is out there in the open. The issue of Crude Oil Swap contracts still rages. Whereas crude oil prices fell to about $50 per barrel (about 40% drop in 2014), the corruption in that sector is best imagined. Still, the sale of crude oil could have netted Nigeria N1 or N2Trillion during the year, since Petroleum Profit Tax (paid by oil companies producing within Nigeria) is already reported by the FIRS in its global figure.


Now, consider these real big allegations which were never escalated nor investigated by the last government, and let us think about their implications on these revenues upon which the government bases its budget.

Thisday newspapers on the 10 Dec 2012 carried a story in which the House of representative Committee on Finance directly accused some agencies of deliberate non-remittance of funds to the Federation Account (Consolidated Revenue Fund) as stipulated by law. We are not talking of the mere semantics of paying into an account at CBN here, but of deliberate frauds perpetrated on the people of Nigeria. See http://www.thisdaylive.com/…/cbn-nnpc-npa…/133115/

Let me quote part of the article:

“…In a report titled “Poor Remittance of Internally Generated Revenue to the Consolidated Revenue Fund (CRF) by Government Owned Agencies”, the committee further identified the agencies as those that submit their expenditure profiles with the aim of utilising the revenues they generate.For instance, the report showed that details from the Budget Office of the Federation indicated that NNPC in 2012, budgeted N347 billion as operational income, and planned to spend N305 billion in the same fiscal year…. In 2013, they projected an operational income of N626 billion, while planning to spend N618 billion…. NPA revenue projections in 2012, was N106.27 billion, while its planned expenditure was N160.61 billion. In 2013, its budgeted revenue was N155.95 billion and planned expenditure was N134.92 billion…. FAAN’s revenue projections for 2012 was N39.60 billion while planned expenditure was N36.23 billion, and in 2013, projected revenue was estimated at N48.78 billion, while its planned expenditure is N48.78 billion,” the report showed.

Performance for the fiscal year 2011 showed that of the 36 agencies, it was discovered that N125.6 billion was generated and only N11.8 billion or 9.41 per cent was remitted to the treasury as operating surpluses or dividends.”

So, not only were monies not remitted to the right account, they were fully spent by the same agencies that generated them. This has now been curbed by the TSA. Can you see some of the magic already? Let me quote some more:

“The report also took note of the Bank of Industry (BoI) for failing to make any remittance to the Consolidated Revenue Fund (CRF) of the Federal Government. It said that the revenue projections for BoI in 2012 was put at N636.271 million and was expected to remit to the CRF the sum of N159.067 million, but not a single kobo was remitted in the year under review…. Similarly, the Corporate Affairs Commission (CAC), in its projected revenue of N6.7 billion, failed to remit the expected N1.7 billion to the government treasury. The House, in the report that would be submitted this week for debate at plenary, said that despite the Tertiary Education Trust Fund’s (TETfund) projected revenue of N10.9 billion and remittance of N2.7 billion, no single kobo was remitted to government coffers.

On the 13th of February 2013, the same newspaper carried another report, which amplified the first. Titled “Disquiet Over Non-Remitance of FG’s Revenue”, see http://www.thisdaylive.com/…/disquiet-over-non…/139336/, the article states in part:

“That is why the recent revelation that a total of 52 federal government agencies generated and failed to remit about N9trillion Independent Generated Revenue (IGR) to the government between 2009 and 2012 has been greeted with angst…. According to the Fiscal Responsibility Act, 2007 (FRA), “operating surplus and general reserve fund, notwithstanding the provisions of any written law governing the corporation, each corporation shall establish a general reserve fund and shall allocate thereto at the end of each financial year, one-fifth of its operating surplus for the year.“The balance of the operating surplus shall be paid into the Consolidated Revenue Fund of the Federal Government not later than one month following the statutory deadline for publishing each corporation’s accounts…. The corporation’s surplus be classified as a Federal Treasury Revenue where a corporation’s result is a deficit, the deficit shall be classified as the corporation’s loss for the fiscal year. Each corporation shall, not later than three months after the end of its financial year, cause to be prepared and published its audited financial reports in accordance with such rules as may be prescribed from time to time.”

One firebrand economist that was interviewed by the newspapers, Odilim Enwegbara, had this to say:

“In the meantime, I urge President Jonathan to order that some internationally respected accounting firms re-examine the books of these agencies to see how much these books were cooked because what we are talking about here is not mere financial crime but financial murder.”

Enwegbara urged the government to implement the TSA that the Buhari government has now implemented today, but his appeals probably fell on deaf ears. Hear him:

“This way, they should never have access to any funds except funds appropriated by the National Assembly in that year’s budget. Nigerians should be ready to return to the streets should these financial murder be allowed to go free,” he warned.

Thisday newspapers concluded its report thus;

When contacted, Director General, Budget Office of the Federation, Dr. Bright Okogu, declined to comment… In fact, a breakdown of the investigation showed that while in 2009, the agencies raked in IGR to the tune of N3.06 trillion, while remittance to the treasury was N46.8 billion or 1.53 per cent, 2010 was N3.07 trillion while remittance was N54.1 billion or 1.76 per cent and 2011 was N3.17 trillion while remittance was N73.8 billion or 2.33 per cent

Honorable Jibrin, the then Chairman of the Reps Finance Committee, had this to say;

“what we noticed is that they generate these funds and create unnecessary expenditure to spend them… we will sit down as a committee to decide the disciplinary action to be taken. But we are working with the Minister of Finance on this.”

Of course nothing ever happened to anybody. The then Minister of Finance probably never gave any direction or displayed a negative body language. Buhari kicked out Jonathan and the rest as they say, is history. This is one area where Jonathan and Ngozi Okonjo-Iweala failed big time in a way that can never be justified.

Buhari may have hit the jackpot! But eternal vigilance everyone.


These two policies, even though not started under Buhari, but being diligently implemented under him, may be the most impactful against corruption and mismanagement, and therefore the real game-changers.

Treasury Single Account (TSA) is there to ensure every revenue due to the Federal Government actually gets to its coffers. No more hanky-panky by the banks. No more profiting from those accounts by big men – and women – in ministries, departments and agencies, some of whom have made vast fortunes from merely leaving huge balances in banks, of monies that should ordinarily be deployed for the provision of public goods. The banks are complaining that the enforcement of this policy will lead to liquidity issues for them. Some are putting up a good face, but anyone who is knowledgeable about how this works, will know that truly the TSA will alter a lot of things in Nigeria. If Goodluck Jonathan had been returned as president, he would never have been able to get some MDAs to actually comply. Some of them – like NNPC – were simply bigger than Nigeria’s ex-president(s).

This is why hundreds of billions of Naira were still being held by some banks until the Central Bank of Nigeria (CBN) had to carry out investigations and discover the pranks. Three banks have been severely sanctioned for these infractions. Apparently, no one wants to dare Buhari the magician. For not only is he a magician, the soldierman in him hasn’t gone to sleep.

The BVN – Bank Verification Number – is another masterstroke. Designed to reduce incidences of frauds and money-laundering in banks, it is proving to be a major bulwark against corruption. Again, it is likely that had Jonathan returned, the deadlines for local account holders may have been further extended. But he didn’t. and so, for people who couldn’t step up to produce different biometrics for the different accounts that they were running using fake names, the balances are frozen in those banks. This is probably equivalent to what Buhari did in 1984 when he changed the colour of the Naira and many who had acquired vast amounts illegally couldn’t step into the banks with those amounts. The monies just went to waste – in their backyards, under their beds or wherever else they had stashed them. Chances are he may still one day implement this same colour-changing policy for we hear of mountains of Naira in some former government officials’ or public servants’ mansions all over the country.

And so the BVN policy moved from being merely a policy against fraud, to a policy against corruption. Going forward it will be impossible for some crazy government official – or indeed anyone – to actually walk into a bank and cause to be opened an account in a fictitious name. In the ongoing case against one Maina, who was a mere Assistant Director in the Pension Office under Jonathan, it has been revealed how he diverted billions of pensioners’ monies into different accounts – some of which were run by his relatives on his behalf.

Right now, we hear that some politically-exposed people who cannot vouch for what they have acquired have simply run away and left the fortunes. Some of them could not also afford to be linked with all the accounts that they own because then it can be revealed at the touch of a button – using the BVN – just how many trillions are in banks in their names. The next progression with the BVN innovation will be targeted investigations by agencies like EFCC, where some people who still have vast fortunes in their accounts without an explanation of how these monies were come by – whether through business or paid employment – will be asked to account for it. No one will ask anyone not to be a billionaire, just account for how you made the money. The age of transparency will come upon us and technology has played a major role. A certain Senator and ex-student union leader who recently bought a $450,000 Rolls Royce – among his dozens of cars – will find it hard to explain his source of wealth. Ditto Nigeria’s chief blogger, who recently stepped up to boast that she had just acquired a house in Banana Island for ‘over half a billion Naira’. Even where income could be legitimately verified, the next issue will be tax evasion. Hopefully, this will mean that people with legitimate income will no longer be harassed and oppressed in this country by charlatans, money-launderers and highly-corrupt folks. Or even armed robbers, drug barons and other sundry criminals. But the war will be a tough one.

The telecoms equivalent of the BVN is the reason why MTN is today wriggling under the weight of a N1.4trillion fine. That telecoms company had neglected to register 200,000 anonymous people who had acquired its phone lines. Some of these lines were acquired by terrorists and other criminals – including corrupt public officials – who used them to wreak havoc on this country and its people; financially, militarily, socially and otherwise.


I conclude by drawing attention again to what is called our Fiscal Productivity, which is the lowest in Africa. According to a big friend of mine, Dr. N. N. Susungi (a former presidential candidate in Cameroun), Nigeria is an oddity because our budget is simply not a true reflection of our economy. The revenue aspect of our federal budget is simply below par, when put side-by-side with our earnings potentials, and our GDP. Hear him:

“Forget about the GDP Growth Rate and Pay attention to Fiscal Productivity and Tax Revenues. These days when I hear about African countries with high economic growth rates, I yawn because those figures are so misleading. What is important is tax revenues generated by the government because that is the spending power of the country… The power of the South African Economy is that it generates over $90 billion in tax revenues a year. Nigeria is supposed to be the 2nd economic powerhouse in Africa, but it can only generate $23 billion in tax revenues even though it produces and exports 2.6 million barrels of crude oil per day while Angola generates up to $56 billion in tax revenues for producing around 2million barrels per day. Nigeria is not an economic giant. It is a large grape fruit which contains no juice. Cameroon’s GDP is $25 billion, but it only generates tax revenues of $5.2 billion while Equatorial Guinea generates $10.2 billion in tax revenues.”

So there you have it. The figures he used were for 2014. If our economy is bigger than that of South Africa, how come the government collects a quarter of the taxes and revenues that South Africa extracts from its economy. Don’t run away with the usual cliché ‘Nigerians don’t pay taxes’. That is not the issue here. We the hoi polloi may be paying more than South Africans already. But the issue with Nigeria is that a lot of the collections simply never make it to government coffers because they are diverted into private pockets along the way. TSA and BVN to the rescue! Hopefully.

If South Africa is too big a comparison, how come Angola, our partner-in-crude-oil-crime, generates tax revenues of $56billion and is thus able to have a bigger budget yearly for its people, while Nigeria has less than half of that? Again, it is tricks and corruption.

So, Buhari is on to something here. The N8Trillion proposal – if it comes through – is possible. And even though Recurrent Expenditure may still form majority of that, it is a good beginning.

In the meantime, visit a local ‘joint’ in your area and notice that Nigerians no longer have as much money for jollification. Apparently the policies are biting harder. I suggest though, that the government takes control of the narrative and spins it all positively for itself. The downtrodden may just not understand why his monied friends or family no longer ‘drop something’ anymore. Or why everyone now seems to be angry, going into this Christmas. Nigerians are recoiling into themselves. The life-savers are drying up. We are becoming like Europe!

by Tope Fasua

Tope Kolade Fasua is a Nigerian ex-banker, entrepreneur, economist and writer with 28 years of work, business and policy analysis experience. He is the founder and CEO of Global Analytics Consulting Limited, an international consulting firm with its headquarters in Abuja, Nigeria, and footprints in the United Kingdom, USA and United Arab Emirates. Fasua has authored numerous columns on newspapers and six books. He currently keeps regular columns on policy analysis issues with Premium Times and Daily Trust newspapers.

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