Senate fear SEC may liquidate by 2023
The DG disclosed that the agency has been operating a deficit budget over the years. He made this known during an interactive session with members of the Senate Committee on Finance, National Planning, Foreign and Local Debt; Banking, Insurance, and other Financial Institutions; Petroleum Resources (Upstream), Down Stream; Petroleum Sector & Gas.
Yuguda revealed that from January 2021 to June 2021, the Commission realised a revenue portfolio of N11.6 billion, while recording a total expenditure of N16.67 billion, leaving behind a balance of N5.17 billion.
He said the situation was caused by a market meltdown and the COVID-19 pandemic.
According to him, SEC is overburdened by a staff strength of 544, including pension for retired officers and a personnel cost of N10.322 billion.
He stressed that since June 2020, SEC has been paying 25 per cent of its gross revenue of N1.5 billion to the national treasury.
The DG, who claimed that the Commission has an investment portfolio of N6 billion with the Treasury Single Account, including ownership of Government Treasury Bills, could, however, not explain the source of the money used by the Commission to fund its budget deficit.
In his remarks, Chairman of the Committee on Finance, Solomon Adeola (APC, Lagos) criticised the Commission’s unsubstantiated budget remarks, condemning the DG’s inability to provide proof showing how SEC funds the budget gap.
Adeola said: “In the last three years, the personnel cost has been on the increase. Your salary profile, your top half of the profile is talking about 70 per cent of total emoluments of N9 billion. Only 30 per cent goes to the lower cadre. We should know what is happening. This is the second year you are coming with a deficit budget.”
A member of the Committee, Tokunbo Abiru (APC, Lagos), lamented that the returns generated by the commission “is way below its expenditures.” He pointed out: “As a regulator to businesses making profit, and you’re not making profit, it is a challenge.”
He said: “In 2019, you have a deficit of 2.9 billion; 2020, you have 4.3 billion, and the returns you are getting from these investment securities are way below what can fund it. So, it is either you are borrowing money somewhere to fund these operations, which I honestly think is not the best thing to do.”
Also, during a stakeholders’ meeting on the 2022-2024 Medium-Term Expenditure Framework and Fiscal Strategy Paper (MTEF-FSP), Adeola frowned at the refusal of 26 of the 63 government-owned enterprises to key into revenue generating agencies established by the Budget Office of the federation.
“We cannot continue to allow the government to borrow money to fund projects while some people keep government revenues in their private pockets,” he said.
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