Reps mull amendment to Fiscal Responsibility Act to block revenue leakages
... want improved funding for healthcare, education, others in 3 years
In its Revised Legislative Agenda, the House of Representatives has indicated plans to initiate an amendment of the 2007 Fiscal Responsibility Act (FRA) to require revenue generating agencies deposit at least 80 percent of their revenues into the Consolidated Revenue Funds (CRF) rather than their operating surplus, which they arbitrarily determine as of today.
The Revised Legislative Agenda document submitted to President Muhammadu Buhari, seen by BusinessDay, is not yet in public domain.
The House also wants to introduce a Bill that would ensure effective coordination of donors and efficient/judicious use of all funds from foreign Official Development Assistance (ODA). The intended donor bill is also to ensure that all donor assistance align with development plans, while placing priority on the engagement of Nigerian development practitioners/local experts in the implementation of donor programmes.
Nigeria’s ninth House of Representatives had launched its legislative agenda last year November, which intended to among others, take necessary legislative steps to address national challenges, poverty, infrastructure decline, waste of resources, revenue leakage and corruption.
But the outbreak of the COVID-19 pandemic, which has taken toll on all spheres of national live, particularly the economy, had stalled the attainment of those goals, necessitating an updated agenda that would carter for the emerging trends.
The Updated Legislative Agenda, which was presented to President Muhammadu Buhari by the speaker of the House, intends to initiate, pass and codify special interventions/legislations in response to impacts of COVlD-19 on the economy.
Some of the interventions as outlined in the new agenda include stimulus packages, tax rebates, loan repayment waivers, especially for the Micro, Small and Medium Enterprises (MSMEs) and passage of the Petroleum Industry Bill (PIB) to improve efficiency, reduce wastage and limit corruption in the petroleum sector.
The new agenda are also to promote SMEs in the country by mandating that a percentage of all Federal Government contracts be awarded to indigenous small and medium-sized enterprises and ensuring that all Ministries, Departments and Agencies (MDAs) of government are in full compliance with the Local Content Laws of the federation.
Of all these, the amendment of the Fiscal Responsibility Act (FRA), 2007 and Donors Coordination Bill is expedient to check leakages and funds wastage as well as promote accountability and transparency, experts say.
As it is presently, the Fiscal Responsibility Act 2007, mandates any government agency that generates revenue to remit 80 percent of its operating surplus to the Consolidated Revenue Fund (CRF) account, instead of the generated revenues.
According to experts, the amendment of the Fiscal Responsibility Act will save a situation where revenue generating agencies spend huge percentage of funds generated on their expenditure, remitting a fraction to the national purse.
Tope Fasua, CEO, Global Analytic Consult, says amending the FRA has become important because recent probes have revealed gross misappropriation of funds by most MDAs.
“It is really very embarrassing. In many instances, 95 percent spent is on themselves in total disregard to the people of Nigeria. Initially, they have proposed that only 60 percent should be spent on their internal expenses, but now if it is 80 percent they can agree so be it. I think it is great development. MDAs in this country must be responsible to the Nigerian people and so I support that,” Fasua states.
On the proposed legislation for foreign donations, Fasua notes, “Anything like donations, official development assistance that come from abroad need to be coordinated as well. We need to know what is coming from where because sometimes some of these donations have strings attached to them, just as we complained about debt servicing.
“We also need to know where the donations are coming from – it is all about accountability because many times these donations also have implications and obligations that the Nigerian government must fulfil. So, I think we are moving into an area of transparency and accountability, which is perfect for this country.”
Also, an Abuja-based lawyer and policy analyst, Georgina Dakpokpo, says Nigeria needs to regularly review its laws to address revenue leakages by some revenue generating agencies, and make laws to coordinate donations so as to avoid misapplication.
“May be at that time it was expedient, but considering that the government still pays their salaries from the central purse aside from the money they retain as it were. So, it is a good idea to review that law so that government has some control. Even with TSA, we have some agencies who still have their accounts and I think it will help ameliorate revenue leakages,” she states.
For donor assistance, she notes, “It is perfect to have a law. We have a case recently where some donations were made for some IDPs and they got missing along the way. I think if we have a law controlling that it will be a very welcome idea.”
Meanwhile, healthcare, education, agriculture, security and power sectors would get improved budgetary allocations, funding and other forms of interventions from 2021 to 2023, as contained in the revised Legislative Agenda.
The House through immediate, intermediate and long-term legislative actions plans to review national health budget by ensuring an increase in funding by at least 5 percent of the current health allocation in the 2021 budget to address critical infrastructure gaps; shortage of drugs, equipment and consumables, strengthen research capability in health institutions, and address human resource challenges in the health sector, especially in response to the COVID-19 pandemic.
For the education sector, the updated Agenda sets out to ensure systematic and sustained budgetary increases in funding for the education sector beginning in 2021 budget and targeting the 26 percent UNESCO recommendations.
Under agriculture, the Agenda advocate for prioritisation of the 2021 budget to support critical aspects of the sector and provide for infrastructure, research and development in the agriculture sector in the 2021, 2022 and 2023 budgets.
For security, the Agenda intend to provide funding in the 2021 and 2022 budget for recruitment and training of new security operatives with higher educational levels to strengthen the security sector workforce and position it for effective performance and ensure the enactment of legislation and appropriations of funds in the 2021 and 2022 budgets to fund the implementation of community policing, civil-military relations, and crime prevention.
In the power sector, the House is to ensure increased appropriation in the 2021 and 2022 budgets to support the dilapidated infrastructure in the power sector and support full and efficient commercialisation of the industry to attract new capital and advanced technology.