Stakeholders Seek Amendment to Plug Loopholes in Fiscal Responsibility Act

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Ndubuisi Francis and Udora Orizu in Abuja

Stakeholders have canvassed the enactment of new and improved fiscal responsibility laws for the states of the federation with a view to plugging the loopholes inherent in the Fiscal Responsibility Act (FRA, 2007).

They canvassed the position in Abuja, Wednesday, at the media launch of the subnational fiscal sustainability report, which is a collaborative effort of the Centre for Social Justice the Fiscal Responsibility Commission (FRC).

The acting FRC Chairman, Mr. Victor Muruako, who was represented on the occasion by Head Legal, Investigation and Enforcement of the Commission, Mr. Charles Abana, stated that fiscal responsibility and financial prudence are indispensable in the management of public funds of any government, and advocated the enactment of new and improved fiscal responsibility laws for the states to plug inherent loopholes in the FRA, 2007.

He noted that the study conducted by the CSJ with the support of Friedrich Ebert-Stiftung Nigeria, to review the implementation of the Fiscal Sustainability Support (FSP) at the state level focusing on six pilot states was a very welcome development, adding that the commission had actually looked forward to the presentation of the final report of the study.

Murako said: “We believe the outcome of this important study will provide a veritable basis for further engagement with both the stated benchmarked for the study as well as other states in the future in order to ensure that the states live up to their obligations in the implementation of the 22 action points of the FSP.

He urged all the representatives of the six pilot states present at the launch to critically review and examine the findings of the report with a view to finding a workable pathway that would engender increased level of implementation of the FSP in their states in a sustainable manner as well as achieve desired improvements in their public financial management system in such a way as to make them responsive to the dynamics of modern fiscal and financial realities and goals of the government.

In his address, the Convener of CSJ, Mr. Eze Onyekpere stated that fiscal responsibility or fiscal sustainability is at the core of good governance, further adding that it is all about translating democratic practices into the fiscal arena, to manage resources in a way that meets the needs of present and future generations, to create wealth and ensure that it is retained for the good of the society.
“In essence, it enables a government to meet its basic obligations and move beyond the basics to take centre stage in the facilitation of development.

According to him, “We are all living witnesses to the fact that Nigerian leaders over the years have failed, refused and neglected to learn from recent history, being the history of the price of crude oil which is the main revenue and foreign exchange earner of the country. The price swings like a yoyo and we are not in a position to predict where and how the pendulum swings. Thus saving for the rainy day in the excess crude account or any other account should have been a national consensus. It should be subjected to the vagaries of politics and such account should have been insulated from the mischief of mismanagement, misallocation, misappropriation or any other illegal, illegitimate or obnoxious management style”.

“But we did not learn and we didn’t diversify our economy away from oil, so as to fall back on something else. This was the prelude to near fiscal collapse of majority of Nigerian states as at the time the bailout packages were arranged. The federal government through the ministry of finance arranged a fiscal sustainability plan being a framework for subnational governments in Nigeria and consists of five strategic objectives and 22 action points”.

He further added: “The key objectives of this report is to provide a platform for support and learning between civil society organisations (CSOs), legislative committees and fiscal responsibility commission (FRC) in the oversight of fiscal responsibility issues, engage ministries, departments and agencies (MDAs) in the preparation and review of their medium term sector strategies (MTSS), advocate for the enactment of fiscal responsibility commission laws in states that are yet to enact the law, engage the preparation process of medium term expenditure frameworks (MTEF) and build the capacity of the civil society on a detailed provisions of the FRA and to support CSOs to improve on needed skills for monitoring, reporting and evaluating the implementation of the FRA”. Onyekpere said
Furthermore, he said that the study being presented sought to find out how states have fared in the implementation of the Fiscal Sustainability Plan and due to limited resources, six states per one geopolitical zone.