The Nigerian Federal Government has issued a stern warning to Ministries, Departments, and Agencies (MDAs) regarding potential sanctions for non-compliance with new mandates aimed at addressing the nation’s significant N39 trillion negative net asset position. During a recent sensitization workshop in Abuja, Dr. Oluwatoyin Madein, the Accountant-General of the Federation, introduced a comprehensive plan to establish a National Assets Register. This initiative is part of a broader strategy focused on improving asset documentation within MDAs and ensuring that the federal government has an accurate understanding of its financial standing. The workshop, themed “Legacy Assets Rendition and Preparation of Stand-Alone Financial Statements by MDAs,” aimed to gather finance directors and senior financial officers to discuss effective strategies for cataloging national assets accurately.
Dr. Madein explained the implications of a negative net asset position, which occurs when a government’s total liabilities surpass its total assets. She outlined that Nigeria’s extensive liabilities arise largely from a lack of thorough data concerning government-owned assets. This absence of data led to the alarming figures reflected in the 2021 consolidated financial statements, which reported a deficit of N39 trillion. Despite Nigeria having adopted the International Public Sector Accounting Standards (IPSAS) on an accrual basis back in 2016, many government assets have yet to be recorded officially. The resultant delays in asset reporting from various MDAs have obstructed timely and accurate financial statements, thereby complicating measures intended to alleviate the asset deficit.
To directly address this issue, Dr. Madein announced the creation of a National Assets Register, a pivotal tool intended to catalog all governmental assets, including infrastructure such as buildings, roads, hospitals, and schools. She stressed the distinguishing need for accurate financial statements to foster transparency and attract international donors, investors, and other economic stakeholders interested in Nigeria’s financial landscape. Dr. Madein asserted the urgency of undertaking a comprehensive inventory of these assets and highlighted that the federal government’s financial statements must be precise, comparable, and useful to all parties involved.
MDAs have been instructed to comply with new deadlines stipulating the submission of stand-alone financial statements, which include statements of financial position, performance, and cash flows, by December 31, 2024. Although asset reporting is an ongoing requirement, some MDAs have not been able to fulfill their obligations in a timely manner. This workshop served as a platform for collaboration among participants to identify productive ways to move forward. Dr. Madein expressed hope that post-workshop, participants would be able to submit the inventories of their respective assets, which would subsequently be evaluated and incorporated into the financial statements by the January 2025 deadline.
The Accountant-General’s office reiterated the consequences for non-compliance, emphasizing that MDAs failing to adhere to the new directives could face sanctions. Dr. Madein stated, “The AGF’s office will initiate measures to enforce compliance,” asserting that the timely rendition of financial statements is vital for the national interest. The urgency of the asset rendition initiative cannot be overstated, with Dr. Madein lamenting the slow pace at which many MDAs report their financial information. The combined delays affect the predictive accuracy of consolidated financial statements and hinder strategies to rectify the overarching net asset deficit. She urged all MDAs to expedite their action on the rendition of legacy assets to avoid potential penalties associated with their inaction.
During the workshop, Mrs. Oluwakemi Owonubi, the Executive Director of the Ministry of Finance Incorporated, underscored the significance of the initiative, advocating for the transformation of Nigeria’s current net liabilities into positive net assets. The National Assets Register is envisioned not only as a comprehensive tool for financial transparency but also as a crucial step towards establishing a more credible financial framework for the nation. She echoed the sentiments of urgency expressed by Dr. Madein, highlighting that the collaborative efforts from MDAs in documenting assets accurately are vital for the realization of Nigeria’s economic potential and stability. The establishment of an effective asset catalogue can potentially bolster the country’s appeal to investors and enhance fiscal accountability, marking a necessary progression in Nigeria’s financial management practices.
