FG’s Negative Net Assets Hit N39tn in 2021, Orders MDAs to Expedite Rendition    

James Emejo in Abuja

The Accountant General of the Federation (AGF), Dr. Oluwatoyin Madein, yesterday decried the slow pace of legacy asset rendition by Ministries, Departments, and Agencies (MDAs) which has negatively impacted the federal government’s fiscal position.

Madein said the delay had resulted in huge negative net assets of N39 trillion in its 2021 Consolidated Financial Statements.

A negative net asset position implies that total liabilities exceed total assets.

The AGF disclosed this at the opening of a one-day sensitisation workshop on Assets Rendition and Preparation of Stand-Alone Financial Statements by MDAs, with the theme, “National Assets Register and the Strategic Importance of Legacy Asset Rendition in the Implementation of IPSAS Accrual Basis Accounting in Nigeria” in Abuja.

She lamented that since the country adopted IPSAS accrual accounting on January 1, 2016, many legacy assets are yet to be recognised, measured, and uploaded to date, leading to huge negative net assets in its balance sheet.

She said, “Unfortunately, the pace of rendition by Ministries, Departments, and Agencies (MDAs) has been disappointingly slow” adding that the delay had continued to hamper the timeliness and accuracy of the consolidated financial statements and significantly impacted the federal government’s ability to address the net asset deficit as expected.

Madein, therefore, urged the MDAs to expedite action on the rendition of legacy assets which represents a pivotal tool for strengthening the government’s fiscal position and alleviating budgetary pressures.

The AGF pointed out that by systematically cataloging and valuing legacy assets which are long-term resources that have often been overlooked, MDAs can unlock substantial value that would otherwise remain dormant.

She said going forward, the AGF’s office will initiate measures to enforce compliance, adding that sanctions will be applied to non-complying MDAs that continue to delay these critical renditions.

She said, “By adhering to these directives, MDAs can contribute meaningfully to national interest while avoiding any penalties associated with non-compliance.”

To further address the asset-liability, the AGF said all MDAs must submit the inventory of assets, which will be reflected in the December 31, 2024 financial statement.

In addition, Madein said effective legacy asset management could help identify opportunities for better utilisation or liquidation, generating much-needed revenue while proceeds from the monetisation of underperforming assets can be redirected towards debt servicing, alleviating pressure on fiscal budget among others.

She said legacy asset rendition fosters a culture of responsibility among public officials, ensuring that assets are maintained and utilised in the public interest among other benefits.

Also speaking at the workshop, Executive Director, Ministry of Finance Incorporated (MoFI), Mrs. Kemi Owonuni, explained that the net asset liability was not well represented in the asset side of the federal government’s accounts, adding that from the investment perspective MOFI was looking to identifying, enumerating and establishing what the federal government owns.

She said, “So if you look at the two sides of the balance sheet the liability side is very well represented because if we go to the DMO and we check the ministry of finance, we will get a number very quickly, but the asset is somewhat missing out and that’s one of the reasons why we’re having this engagement today and we have a negative net liability position.

“Between MoFI and the office of the accountant general, you’re looking at the totality of the assets of the federal government and this is where the assets register.