The federal government is grappling with an alarming N39trn negative net asset position, following its adoption of the International Public Sector Accounting Standards......See Full Story>>.....See Full Story>>
The Accountant General of the Federation, Mrs Oluwatoyin Madein, disclosed this on Tuesday in Abuja during her keynote address at the sensitization retreat with Directors of Finance, Accounts and Internal Audits.
Since Nigeria first adopted IPSAS accrual accounting in January 2016, many of the country’s legacy assets such as government-owned buildings, infrastructure, and other long-term properties have not been properly catalogued, valued, or included in national financial reports.
As a result, Nigeria’s financial statements continue to reflect a significant deficit, with the negative net assets standing at a staggering N39tn as of 2021.
The negative net asset position highlights a deepening fiscal crisis that underscores the need for immediate action in the country’s financial management practices.
The AGF’s comments comes amid the slow pace of adopting the International Public Sector Accounting Standards (IPSAS) and accurately reporting government assets.
Madein frowned at the failure to properly recognize and measure legacy assets stating that this is a critical factor exacerbating Nigeria’s fiscal challenges.
She said these long-term government assets if fully accounted for, could significantly offset the massive financial gap and provide a more accurate picture of the nation’s true financial position.
According to the AGF, despite the government’s efforts to comply with IPSAS standards, many Ministries, Departments, and Agencies (MDAs) have been slow to report legacy assets, delaying crucial financial reporting and hindering efforts to stabilize the country’s fiscal outlook.
With the country’s financial future at risk, Madein called for urgent action to address the legacy asset reporting delay, which has led to the underreporting of government resources.
She emphasized that MDAs must act quickly to identify, value, and upload these assets into the National Assets Register. Failure to do so, she warned, will lead to sanctions.
She said, “The strategic importance of legacy asset rendition cannot be overstated. Unfortunately, the pace of rendition by Ministries, Departments, and Agencies (MDAs) has been disappointingly slow.
“This delay hampers the timeliness and accuracy of the consolidated financial statements and significantly impacts our ability to address the net asset deficit as expected MDAs are therefore urged to expedite action on the rendition of legacy assets.
“Legacy asset management represents a pivotal tool for strengthening our fiscal position and alleviating our budgetary pressures.
“By systematically cataloging and valuing legacy assets-long-term resources that have often been overlooked- MDAs can unlock substantial value that would otherwise remain dormant.
“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.
“By adhering to these directives, MDAs can contribute meaningfully to the national interest while avoiding any penalties associated with non-compliance.”
The AGF outlined the strategic importance of legacy asset management, noting that by accurately valuing and utilizing these underreported resources, Nigeria could unlock substantial revenue, reduce debt pressures, and create an avenue for greater fiscal stability.
Madein identified several key benefits of properly managing legacy assets, which could prove vital in alleviating Nigeria’s fiscal crisis.
By monetizing or leveraging underperforming assets, she said the government could generate the necessary funds to service both domestic and external debt, easing the pressure on Nigeria’s strained budget.
She added that efficient asset management could lead to better utilization of public property, providing additional revenue streams to the government, adding that more rigorous process of asset rendition will foster greater accountability and transparency in public financial management, helping to rebuild trust in government institutions.
This financial imbalance has far-reaching implications, especially as the country faces high inflation, growing debt obligations, and a challenging global economic environment.
The AGF’s remarks come at a critical time for Nigeria, as it continues to recover from the economic fallout of the pandemic and rising global commodity prices.
The government has identified fiscal reform as a top priority, with asset management seen as one of the key levers to turn the financial tide.
To improve transparency and restore fiscal health, Madein also emphasized the importance of adopting the Stand-Alone Government-wide Public Financial Statements (GPFS) in line with IPSAS.
This method of independent financial reporting will not only provide a clearer picture of the government’s financial health but also empower decision-makers to allocate resources more effectively and hold public officials accountable.
“By preparing Stand-Alone GPFS, we will have a clear, comprehensive view of our financial standing, which is essential for informed decision-making and strengthening accountability,” she added.