The Federal Government has warned that it will impose sanctions on Ministries, Departments, and Agencies that fail to comply with new directives on National Assets Register.
This announcement comes as part of efforts to tackle Nigeria’s N39 trillion negative net asset balance through the creation of a detailed National Assets Register.
This announcement comes as part of efforts to tackle Nigeria’s N39 trillion negative net asset balance through the creation of a detailed National Assets Register.
This effort involves the creation of a comprehensive National Assets Register aimed at enhancing transparency and accountability in the documentation of government-owned assets.
The Accountant-General of the Federation,Dr. Oluwatoyin Madein, made this announcement during a one-day sensitization workshop held in Abuja.
The workshop, themed ‘Legacy Assets Rendition and Preparation of Stand-Alone Financial Statements by MDAs’, brought together finance directors and senior financial officers from MDAs to deliberate on effective strategies for accurately cataloging national assets.
In financial terminology, a negative net asset position occurs when an entity’s total liabilities surpass its total assets.
Madein explained that Nigeria’s predicament, marked by an apparent surplus of liabilities over assets, is largely due to inadequate data on federal assets.
She noted, “Consequently, we still have huge negative net assets in our 2021 consolidated financial statements which stood at N39tn.”
Despite Nigeria’s transition to the International Public Sector Accounting Standards on an accrual basis in 2016, many assets remain unrecorded, contributing to the alarming N39 trillion negative net asset figure reported in the 2021 consolidated financial statements.
Madein pointed out that the slow pace of asset reporting by MDAs has significantly impeded the accuracy and timeliness of these crucial statements, further complicating efforts to rectify the existing asset deficit.
To remedy this situation, the Accountant-General announced the establishment of the National Assets Register, which will systematically document all government assets, ranging from infrastructure such as buildings and roads to essential facilities like hospitals, schools, and equipment.
She emphasized the register’s importance, stating, “We need to take a good inventory of these assets. The financial statement the federal government gives must be accurate, comparable and useful.”
This initiative is particularly critical for attracting international donors, investors, and stakeholders interested in Nigeria’s economic landscape.
MDAs have been given a compliance deadline of December 31, 2024, to submit their stand-alone financial statements, which must include comprehensive statements of financial position, performance, and cash flows.
Madein reiterated the urgency of this task, noting, “It’s an annual thing, but for now, because it has been due for some time, and it was observed that some MDAs have not been able to render, that is exactly why we are here, to come together in this workshop to discuss on the way forward.”
The Office of the Accountant-General has made it clear that non-compliant MDAs may face strict sanctions.
“The AGF’s office will initiate measures to enforce compliance. Sanctions will be applied to non-complying MDAs that continue to delay these critical renditions,” Madein warned.
She urged MDAs to embrace these directives, highlighting that timely compliance would not only help in addressing the net asset deficit but also avoid penalties associated with non-compliance.
The strategic significance of the legacy asset rendition process cannot be overstated. Dr. Madein expressed disappointment at the slow pace of asset reporting by MDAs, emphasizing that delays hinder the accuracy and timeliness of consolidated financial statements, which in turn affects efforts to mitigate the negative net asset situation.
“As expected, MDAs are therefore urged to expedite action on the rendition of legacy assets,” she stated.
The workshop featured insights from Mrs. Oluwakemi Owonubi, Executive Director of the Ministry of Finance Incorporated, who underscored the initiative’s importance.
She articulated that the National Assets Register would not only clarify the state of federal assets but also play a crucial role in transforming Nigeria’s net liabilities into positive net assets, ultimately contributing to the nation’s economic stability and growth.
