2023 budget:MDAs appropriated N204m for bank charges


…As experts say fees are padded to accrue returns to senior officers, call for special audit

By Ogaga Ariemu

Some Federal Ministries, Departments and Agencies (MDAs) have earmarked over a total of N204.12 million as bank charges in the 2023 appropriation bill, NewsDirect learnt from the expenditures released by the Presidency after President Muhammadu Buhari presented the N20.5 trillion budget proposal on Friday.

Affected agencies are National Identity Management Commission(NIMC) and the Department of Police Formation and Command.

Reacting to the development in an exclusive chat on Wednesday, Financial Inclusion/Wealth Management expert, MD/CEO SD & D Capital Managment Limited, Mr Idakolo Gbolade disclosed that the bank charges are padded to accrue commensurate returns to senior officers managing the accounts. “This is the reason for over bloated national budget and budget deficit”, he said.

Idakolo suggested that the practice can be curtailed by ensuring that MDAs accounts are designated as government accounts which do not attract charges such as maintenance and other sundry charges due to the amount of funds passing the accounts regularly.

“Most MDAs have accounts for recurrent expenditures and imprest with Deposit Money Banks, however because of the Single Treasury Account of MDAs domiciled with the CBN where the revenues due to the federal government accrue to, these MDAs needs to use banks for the daily administrative costs.

“We have seen in most instances that these charges are padded to ensure commensurate returns to seniors officers in charge of running these accounts.

“This practice of padding and many more unwholesome practices by the MDAs accounts for the over bloated budgets from the MDAs there by increasing the budget deficits.

“These practices can be curtailed by ensuring MDA accounts in Banks are designated as government accounts that must not attract charges like maintenance fees and sundry charges due to the amount of funds passing the accounts regularly.

“These concessions are already in place by banks for organisation volumes with banks and I see no reason why it cannot be extended to government accounts in the Banks”, he stated.

On his part, an economist and the chairman of Chattered Institute of Bankers of Nigeria (CIBN) Abuja branch, Prof. Uche Uwaleke has called for a special audit of the MDAs 2022 transactions to justify budget.

According to him, “I think the starting point is to carry out a thorough audit of their Bank transactions in 2022 in order to determine the justification for the what they have budgeted in 2023.

“The amount involved is huge despite the introduction of TSA which requires all MDA to consolidate all receipts with the CBN which automatically eliminates some charges.

“The special audit, by private audit firms, (not the Office of Auditor General) becomes imperative against the backdrop of the fact that some banks are notorious for subjecting the accounts of MDAs to excess charges sometimes in collusion with corrupt government officials”, he stated.

Both chambers of the National Assembly, the Senate and the House of Representatives, on Wednesday, commenced debate on the general principles of the 2023 Appropriation Bill.