2021 Budget: FG Will Sanction Agencies That Fail To Meet Revenue Target-Finance Minister

The Federal Government said it will sanction its enterprises that fail to meet its revenue projections for the implementation of the 2021 budget.

The Ministry of Finance, Budget and National Planning said this was part of its initiative to improve revenue for the 2021 approved budget.

“Current sub-optimal revenue performance of most Government-Owned Enterprises will be addressed through the effective implementation of the enhanced Performance Management Framework, including possible sanctions should they default on their targets,” the Minister of Finance, Zainab Ahmed, said in a fresh document cited by THE WHISTLER.

Hit with huge revenue short fall since the second quarter of 2020 due to the Covid-19 pandemic, Africa’s largest economy fell into a second recession in less than four years.

The economy by the end of the third quarter of last year contracted by 3.6 per cent, compared with a 6.1 per cent contraction in the previous quarter.

To facilitate recover, the Federal government approved a N13.88trn budget with a revenue projection of N7.98tn.

The deficit stands at N5.6tn, but the government hopes to raise the shortfall from foreign and domestic sources.

From the N7.98tn revenue projected for 2021, the sum of N2.17tn is expected to be generated from Government Owned Enterprises.

Zainab said, “To enhance Independent Revenue collection, Government will aim to optimize the operational and collection efficiencies of GOEs, with a view to their generating significantly higher revenues and controlling expenditures more tightly.”

With the slump in oil prices, Africa’s largest oil exporter has moved to cut reliance on crude revenues, while placing greater focus on other sectors for more revenues.

Crude oil contributes about 10 per cent of Gross Domestic Product and 90 per cent of foreign exchange inflow.

The government has already approved into law the Finance Act 2020 which has introduced a new 50 per cent Cost-to-Revenue Ratio for State-Owned and Government-Owned Enterprises.