New automated system sees govt revenue from MDAs surge by massive 442%

Nigeria’s government-owned enterprises, ministries, departments, and agencies (MDAs) witnessed a significant boost in revenue collection, remitting a staggering N835.7 billion to the federal government in February 2024.

This figure, disclosed by the Minister of Finance, Budget and National Planning, Wale Edun, represents a remarkable 441.78% increase compared to the N154.25 billion remitted in February 2023.

The minister stated this during a presentation titled “Reconstructing the Economy for Growth, Investment and Climate Resilience Development,” delivered at the Lagos Business School Breakfast Club, on Friday.

Edun said the government had automated a two-time daily sweep of 50 per cent of MDAs and GOEs internally generated revenue since January 2, 2024, leading to more remitted earnings.

“There is an increasing revenue contribution of MDAs and GOEs, growing from 154.25 in February 2023 to 835.70bn in February 2024 through an automated two-times daily sweep of 50 per cent of MDAs and GOEs IGR since January 2, 2024,” he stated.

READ ALSO:Nigerian govt targeting 77% increase in IGR – Wale Edun

He underscored the importance of implementing an upgraded government revenue assurance model, adding that the target was to reduce the budget deficit from 6.1 per cent of GDP in 2023 to 3.9 per cent.

“We have set out a robust execution plan for a 78 per cent y-o-y increase in budgeted revenue in 2024, but implementing enhanced the government’s revenue assurance model is critical with a target budget deficit of 3.9 per cent of GDP from 6.1 per cent in 2023.”

This dramatic rise in revenue collection can be attributed, at least in part, to a new government initiative implemented in January 2024. The initiative involves an automated system that sweeps 50% of internally generated revenue (IGR) from MDAs and government-owned enterprises (GOEs) twice daily. This newfound automation appears to be yielding significant results, streamlining the collection process and potentially deterring leakages.

However, analysts caution against attributing the entire surge solely to the new system. Factors such as improved economic activity, a crackdown on corruption within MDAs, and a one-off revenue windfall from a specific agency could also be contributing factors.

Financial experts will be keenly watching to see if this surge in revenue collection can be sustained in the coming months. The ability to consistently meet or exceed these remittance levels will be crucial for the government to fund its budgetary needs and deliver on its development goals.

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