Senate Threatens Budget Sanctions, Orders NAFDAC, Others to Reconcile Accounts

The Senate Committee on Finance on Wednesday directed the National Agency for Food and Drug Administration and Control, the Office of the Accountant-General of the Federation and the Fiscal Responsibility Commission to reconcile differences in records relating to deductions from NAFDAC’s operating surplus.

The committee also warned the Ogun-Osun River Basin Development Authority to correct its financial records within 14 days or risk sanctions, including the suspension of its budget releases.

The directives were issued during an investigative hearing in Abuja on the remittance of internally generated revenue and operating surplus by Ministries, Departments and Agencies into the Consolidated Revenue Fund between the 2023 and 2025 financial years. The exercise is part of the Senate’s ongoing review of government agencies to ensure compliance with the Fiscal Responsibility Act and other financial regulations.

Chairman of the committee, Senator Sani Musa, said the reconciliation became necessary after lawmakers discovered conflicting figures presented by NAFDAC and the Fiscal Responsibility Commission regarding deductions from the agency’s operating surplus.

During the hearing, NAFDAC disclosed that it generated ₦18.73 billion in 2023, ₦29.85 billion in 2024 and ₦39.6 billion in 2025, showing a steady rise in internally generated revenue over the three-year period.

The agency’s Director-General, Prof. Mojisola Adeyeye, informed lawmakers that although NAFDAC remitted about ₦3.9 billion as operating surplus between 2007 and 2023, the implementation of the Treasury Single Account policy in January 2024 created financial challenges for the agency.

She explained that under the zero-balance TSA arrangement, deductions were made directly from payments received for regulatory services before the agency could access funds required for its daily operations. According to her, about ₦21 billion had been deducted from payments made by clients, while only ₦13 billion had been refunded.

Adeyeye also revealed that President Bola Tinubu approved the refund of the deductions in August 2025 and later approved the removal of NAFDAC from the list of revenue-generating agencies. However, she said both approvals were yet to be fully implemented.

Following the presentation, the committee advised NAFDAC to forward copies of the presidential approvals to lawmakers to support any legislative action that may be required. It also instructed the Office of the Accountant-General to nominate a senior official to work with NAFDAC and the Fiscal Responsibility Commission in reconciling the agency’s financial records.

The committee commended NAFDAC for improving its revenue despite the financial difficulties created by the TSA policy. Lawmakers also maintained that funds belonging to government agencies should be released promptly after lawful deductions have been made.

During the session, Senator Natasha Akpoti-Uduaghan encouraged NAFDAC to strengthen research into traditional medicine, noting that Nigeria has many medicinal plants that could support the growth of the local pharmaceutical industry. Adeyeye responded that the agency already regulates traditional medicines but lacks enough funding to conduct the clinical trials needed for wider acceptance. She also rejected claims that medicines in Nigeria are only 30 per cent effective, stating that compulsory bioequivalence studies have improved the quality of regulated drugs.

The committee also questioned the financial records of the Ogun-Osun River Basin Development Authority after the Fiscal Responsibility Commission reported that the agency had failed to submit audited financial statements since 2022 and still had unresolved financial obligations.

The authority’s Acting Managing Director, Ayo Oyano, said the agency generated ₦72.755 million in 2023 and remitted ₦18.188 million, representing 25 per cent of the amount. However, the Fiscal Responsibility Commission maintained that because the authority is fully funded by the Federal Government, it is required by law to remit all internally generated revenue into the Consolidated Revenue Fund.

The commission also informed lawmakers that the authority had not submitted audited financial statements for 2023, 2024 and 2025 and still had an outstanding liability of ₦71.5 million from 2022.

Musa reminded the authority that its personnel, overhead and capital expenditures are already covered through annual budgetary allocations approved by the National Assembly. He therefore said the agency had no legal right to retain any part of its internally generated revenue.

Although the authority argued that part of the money was used to maintain tractors and other equipment for farmers, the committee rejected the explanation. Lawmakers insisted that all revenue collected by fully funded agencies must first be paid into the Treasury Single Account before being transferred to the Consolidated Revenue Fund.

Senator Aliyu Wadada supported the committee’s position, stating that no government agency can spend internally generated revenue without approval through the budget.

The committee eventually directed the Ogun-Osun River Basin Development Authority to reconcile its accounts with the Office of the Accountant-General and the Fiscal Responsibility Commission within 14 days. Musa warned that failure to comply would attract legislative action, including the suspension of the agency’s budget releases.

The committee said the ongoing investigation is aimed at improving accountability, strengthening transparency and ensuring that federal agencies comply with revenue remittance laws. Lawmakers also warned that any agency that fails to account for public funds or ignores invitations from the Senate could face further sanctions.