Time to maintain fiscal responsibility

NIGERIA as a country has crossed the red line when it comes to the management of public resources. In the midst of revenue shortages where government borrows to pay salaries, it is disappointing, that there are still ongoing leakages and frauds perpetrated amongst government offices. Recent reports of looting and open bribery at the party primaries undermine government effort to sustain the fight against corruption as well as stabilize the economy.  While the case of N80 billion allegedly looted by the Accountant General of the Federation were being mentioned, Nigeria witnessed the massive deployment of foreign currencies to woo delegates in the just concluded party primaries of the two major political parties. Despite the fact that vote buying has been criminalised in the Electoral Act, the anti-corruption agencies failed to make any arrest with the evidence of dollarisation bazaar revealed at the primaries. Such silence can be misconstrued as encouraging fiscal rascality in Nigeria.

For Nigeria to make progress economically, it is time to maintain fiscal discipline in the management of public resources. To achieve this, government needs to implement policies that provide preventive checks against corruption and strengthen the sanction mechanisms in the existing laws. Fiscal discipline can be maintained if the provisions of the Fiscal Responsibility Act are strictly adhered to.  The FRA provides for prudent management of the nation’s resources and to ensure macro-economic stability. It also promotes transparency and accountability in the conduct of government affairs. Fiscal rascality is fueled by lack of transparency and accountability in the use of public resources.  Transparency and accountability is a key preventive measure in the management of public funds and the fight against corruption. For instance, 80 per cent of the funds used by the current administration to run the economy are sourced externally through borrowing but details of these loans and how they are being used are not available in the public domain.

Meanwhile, the Fiscal Responsibility Act provides in section (44), any Government in the Federation or its agencies and corporations desirous of borrowing shall, specify the purpose for which the borrowing is intended and present a cost-benefit analysis, detailing the economic and social benefits of the purpose to which the intended borrowing is to be applied. Nevertheless the information about the loans procured and how they are being used to run the economy are shrouded in secrecy, making it difficult to track and susceptible to diversion. Recall that S.48 of the FRA provides that “the Federal Government shall ensure that its fiscal and financial affairs are conducted in a transparent manner and accordingly ensure full and timely disclosure and wide publication of all transactions and decisions involving public revenues and expenditures and their implications for its finances”. Unfortunately even when Freedom of Information request are written to government agencies to provide details of loans, such requests are turned down. The agencies prefer to challenge such request in court at the expense of government.

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To avoid process abuse and possible cases of under remittance of revenue to the government, there is a need to conduct periodic auditing of revenue generating agencies of government, such as the NNPC, FIRS, Customs, etc.  The FRA S.(22) provides that “each corporation shall establish a general reserve fund and shall allocate thereto at the end of each financial year, one-fifth of its operating surplus for the year. The balance of the operating surplus shall be paid into the Consolidate Revenue Fund of the Federal Government not later than one month following the statutory deadline for publishing each corporation’s accounts.” The lack of external checks and balances amongst the MDAs has given rise to under remittance of revenues, misappropriation and abuse of government funds. This is evident from the Auditor General’s report. Coupled with the above, there is need to impose stricter sanctions in the Fiscal Responsibility Act. The current act does not give the Fiscal Responsibility Commission the direct power to prosecute offenders of the law, hence giving rise to gross indiscipline in the conduct of government fiscal operations. The amendment of the FRA is germane at this time and it should be fast tracked so that the FRC can live up to its mandate.

The Fiscal Responsibility Commission should develop a transparency and accountability checklist that is applicable in all MDAs. The checklist should factor compliance with public disclosure in the conduct of government fiscal affairs. It should also contain compliance with standard procedures in line with laws, policies and guidelines relating to government fiscal transactions. The FRC, should also monitor, and investigate whether any breach has occurred in the process applied. It should also compel government institution to disclose information relating to public revenue and expenditure in the websites of the MDAs. Once again, the powers of the Fiscal Responsibility Commission must be strengthened to fulfill these obligations.

• Emejuiwe, a public affairs analyst/good governance expert, writes in from Abuja