FG ORDERS CLOSURE OF REVENUE ACCOUNTS WITH BANKS

The Federal Government has directed revenue generating Ministries Department and Agencies (MDAs) to henceforth deposit their revenue into Consolidated Revenue Fund of the Federation and Treasury Single Account and close revenue account with the commercial banks. The directive is sequel to the new Electronic Revenue Collection Platform unveiled yesterday in Abuja by the Office of Accountant General of the Federation( AGF).
The directive was announced just as it emerged that shareholders in banking stocks lost about N573 billion during the financial year ended 2014 following massive sell-off that overran the market in the last two quarters of the year.
The Accountant General of the Federation, Mr Jonah Otunla, at a workshop on the take-off of the electronic collection project, directed all MDAs to comply with the new initiative by closing their revenue accounts with banks latest by February 28. The balances of the revenue account, he said, should be transferred to the Consolidated Revenue Fund of the Federation.
The new Electronic Revenue Collection platform is aimed at improving internally generate revenue in view of declining oil prices. According to him, the take-off of the e-collection platform is a product of a series of treasury reforms, which began in 2012, aimed at ensuring transparency and accountability in the management of the nation’s finances.
The reforms, he stated, led to the launch of the Government Integrated Financial Management Information System and the Treasury Single Account. “Our efforts this morning on the e-collection of revenue is a revenue enhancing programme by freeing more funds for budget performance. “We are perfecting a system of collection; we are not perfecting a system depriving commercial banks of income.
So we just want to make revenue collections a little more efficient but in the process it might influence the inflow to the commercial banks and that’s why the central bank is playing a pivotal role,” he added. Giving a broader perspective to the new revenue collection platform, the Director, Funds, Office of the Accountant General of the Federation, Mr. Mohammed Dikwa, said henceforth, government revenues would now be paid into the CRF/TSA.
“With the coming of e- collection, MDAs can no longer maintain Revenue Bank Account with commercial banks. You are therefore advised to transfer any outstanding balance in your RBA to the CRF and immediately commence processes for closing them. “MDAs are given up to February 28, 2015 to close RBA. Appropriate sanctions shall be applied against any MDA that fails to comply,” he stated.
Meanwhile, the net worth of shareholders with banking stocks fell by about N573 billion in the financial year ended 2014 following sale pressure. Investigation by New Telegraph showed that the sub-sector closed the year lower on December 31, 2014 at N2.366 trillion as against the opening figure of N2.939 trillion at the beginning of trading year on January 2, 2014, representing a loss of N573 billion or 24.2 per cent.
On a year-to-date basis, the equities market lost 16.797 per cent as banking stocks were among the worst battered – the NSE Banking Index shed 21.53 per cent year-to-date basis. Similarly, consumer goods stocks as well as industrial stocks tumbled by 17.88 per cent and 15.98 per cent according to their respective gauges.
Foreign investors sold Nigerian stocks as the price of crude dropped into a bear market and on concern that measures the Central Bank of Nigeria (CBN) put in place to stem capital outflows would hinder their ability to sell holdings in Africa’s top oil producer. The fall in the price of crude oil in the international market is sending economic and political shocks around the world. The hardest hit has been countries whose economies depend largely on oil for appreciable percentage of their foreign exchange earnings.
Due to the dismal performance of the local bourse, the Nigerian Stock Exchange was recently ranked the third worst performing stock market during the 2014 financial year.
The Nigerian bourse recorded 33 per cent loss to earn third position among the 10 worst exchanges in the world. The ranking also saw Moscow stock exchange, Russian recording 54 per cent loss to top the list followed by Borsa de Valores de Colombia stock exchange with a loss of 34 per cent to emerge second among other exchanges.
Market analysts believe that despite the general lull in the stock market, the run in banking sector might not be unconnected with recent reports that Asset Management Corporation of Nigeria (AMCON) has begun to offload some of the shares it acquired from the nonperforming loans of banks and other companies due to the upsurge in prices of shares quoted on the local bourse. Some developments in the domestic and global economy are also causing bank stocks to lose their attraction.