Nigeria: Federal Government Directs MDAs to Channel 100% Revenue to New Treasury Account

The Federal Ministry of Finance has issued a directive to all Ministries, Departments, and Agencies (MDAs) of the federal government, instructing them to remit 100% of their internally generated revenue (IGR) to the sub-recurrent account, a sub-component of the Consolidated Revenue Fund (CRF).

The primary objective of this directive is to boost revenue generation, enforce fiscal discipline, and foster accountability and transparency in the management of government financial resources, thereby reducing the risk of waste and inefficiencies.

Wale Edun, the Minister of Finance and Coordinating Minister of the Economy, endorsed the circular, underscoring the significance of these measures for financial management. The circular, dated December 28, 2023, emphasizes the following key points:

1. The Office of the Accountant-General of the Federation is mandated to establish new Treasury Single Account (TSA) sub-accounts for all federal agencies/parastatals listed in the schedule of the Fiscal Responsibility Act, 2007, with potential additions by the Federal Ministry of Finance, with a few exceptions.
2. Fully funded MDAs through the annual federal government budget are required to remit 100% of their IGR to the Sub-Recurrent Account.
3. Partially funded agencies must remit 50% of their gross IGR, while all statutory revenues, such as tender fees and sales of government assets, should be remitted 100% to the sub-recurrent account.
4. Self-funded federal agencies/parastatals, not receiving any allocation from the federal government budget, are directed to remit 50% of their gross IGR, including all statutory revenues, to the sub-recurrent account.

The circular outlines that the new accounts established for these agencies will receive inflows from old revenue-collecting accounts based on the implementation of the new policy, with a 50% auto deduction in line with the Finance Act, 2020, and Finance Circular, 2021.

In order to ensure effective implementation, the Revenue & Investment Department and the Treasury Single Account Department of the Office of the Accountant-General of the Federation (OAGF) will oversee, monitor, and conduct a monthly review of both old and new accounts.

The circular reinforces that the revenue collection TSA Sub-Accounts operated by Agencies/Parastatals for public revenue reception will now be under the full control of the Minister of Finance and Coordinating Minister of the Economy, along with the Accountant-General of the Federation. This change makes them inaccessible to the agencies/parastatals.

To enforce compliance, both the Ministry of Finance and the OAGF will recommend appropriate disciplinary actions and sanctions against accounting officers of agencies/parastatals found in violation of the circular’s content, in alignment with the Fiscal Responsibility Act.