It is no longer news that the outbreak of the Covid-19 pandemic has disrupted many economies of which Nigeria has had its shares. There is a threat of another economic meltdown if urgent steps are not taken. The Fiscal Responsibility Law has become the most vital tool in salvaging the economy if appropriately implemented. This has necessitated the need for repeal and re-enactment that is ongoing in the National Assembly.
Just recently, the Senate Committee on Finance held a public hearing leading to the passage of the proposed amendment of the Fiscal Responsibility Act, 2007. The bill is seeking to amend some sections of the act thereby repositioning the Fiscal Responsibility Commission in executing its mandate as the enforcer of the act and give succour to the already volatile economy by increasing the generation of the independent revenue into the Consolidated Revenue Fund (CRF). It will improve the commission’s funding and capacity to increase the generation of independent revenue collections and curb financial frauds within the Ministries, Departments, and Agencies (MDAs).
It is noteworthy to know that despite all the work done by the Commission, it seems the expected impact is not yet fully seen because some agencies are taking advantage of some gaps in the act to subvert the law. They engage in creative accounting in hiding revenues due to the federal government. It is on record that the Commission has been able to cause to be remitted over N2 trillion into the Consolidated Revenue Fund (CRF) after a long battle with the agencies involved. With the amendment, there is hope for an increase in revenue if the scheduled corporations know that there are appropriate sanctions in the act if they fail to do the needful. It becomes very imperative to ensure that this amendment process scales through forthwith.
It is trite also to note that the Commission has been critical in reorganizing the economy since its inception despite operating in an unfriendly environment and with a faulty law. It has recorded notable achievements ranging from the operating surplus remittance that was not possible before the coming of the Commission, the restoration of the budget circle from January to December of the fiscal year, and verification of capital projects captured in the budget. The fiscal responsibility index designed to track the compliance level of the MDAs is another milestone recorded by the Commission. The Commission is playing a critical role in the National Assembly’s oversight functions to the scheduled corporation which the Senate acknowledged in different fora that the Commission has made their work easier with facts and figures. The template for the calculation of the operating surplus designed by the Commission has made it difficult for the corporations to hide revenue with their creative accounting which was their stock-in-trade before.
By and large, if the Commission must sustain the critical function of providing for prudent management of the nation’s resources, ensuring long-term macro-economic stability of the national economy, securing greater accountability and transparency in fiscal operations within a medium-term expenditure fiscal policy framework, there is a need to quickly pass the proposed amendment bill into law. This will help in restoring the vast economic hope amidst the present global economic volatility caused by the Covid-19 pandemic. As the oil revenue continues to fluctuate and remain unpredictable, increasing the independent revenue collection base will help in revitalizing the economy.
As we look forward to the successful passage of the amendment bill and subsequent signing by the president, we enjoin all the stakeholders and the general public to lend their support to the Commission as they embark on a rescue mission to salvage the nation’s economy and guarantee a prudent, transparent, and accountable financial management for Nigeria.
Benson Igwebuike wrote from Abuja
