• Sunday, December 10, 2023
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Calls heighten for review of Fiscal Responsibility Act as debt soars

Civil Society Organisations and financial stakeholders have raised calls on the National Assembly to amend the Fiscal Responsibility Act to give the Fiscal Responsibility Commission powers to help curb government’s excessive borrowing and put debt in check.

The call for amendment follows growing concerns over Nigeria’s rising public debt which currently stands at N87. 3 trillion, according to the Debt Management Office.

At a Roundtable on Fiscal Responsibility and Debt Management in Abuja on Monday, stakeholders stated that it is unhealthy for Nigeria’s fiscal landscape to keep borrowing huge loans and using as much as 93.6% of the nation’s meagre to service these debts, prompting the need to urgently curb government’s borrowing.

Read also: How Nigeria can defuse ‘fiscal timebomb’ – World Bank

Oke Epia, executive director, of Order Paper Advocacy Initiative, said it was critical to enable the proper activation of the Fiscal Responsibility Act 2007. This, according to him, will address issues of malfeasance, wastage, lack of prudence, accountability and transparency in public finance.

He stated that the Fiscal Responsibility Act as currently enacted does not serve that purpose.

“We should amend the Fiscal Responsibility Act, such that it enables the operators of that Act, the Fiscal Responsibility Commission to be able to push for full, effective and productive implementation. In other words, the commission can have the muscle, the power to both bark and bite.

‘There is a threshold for borrowing by the federal government and the states, you are not supposed to borrow more than 3 per cent of GDP. However, the government has consistently in the last few years lashed out that caveat to overshoot that limit of the 3 % and that is where we are where we are today. If we have a commission that can stand its ground and power to demand compliance and indeed we see compliance, we will not be where we are today.

“So for us, we believe that an amendment of the Fiscal Responsibility Act 2017 to empower the commission to be able to live up to his responsibility is a key objective’, he said.

Epia emphasized the need for enduring solutions to the fiscal public finance management issues plaguing the country. He raised questions about the recent approval of over N2 trillion supplementary budget and the loan for fuel subsidy palliative.

The executive director also questioned the tangible effects of these borrowings on the citizens, emphasizing the disconnect between government allocations and the actual impact on the streets.

He berated the National Assembly for lagging in its oversight role, and urged the legislature to ensure proper scrutiny of government borrowings, as it is vested with the power of approval,

Epia said legislators must move beyond lip service and ensure funds are utilized for the welfare of citizens, and not for funding luxurious lifestyles.

Read also: Achieving tax compliance in Nigeria: A path to fiscal sustainability

“We are also aware that the government plans to borrow some more and more, mortgaging the future of generations unborn. How do we achieve any form of fiscal sustainability in a situation like this? Who has the responsibility to ensure that we maintain a healthy balance between borrowing our expenditure, revenue and public service delivery, he queried.

Berating the National Assembly for failing in their duties of checkmating the government excesses, he stated: “On the other hand, which is more critical, is the duty of oversight, having made the approvals and allocations dispensed, what has the National Assembly, done to ensure that these monies and allocations set the purposes for which they have been allocated and indeed dispensed?” He queried.

Charles Abana, head, Directothe rate of Legal Investigation and Enforcement, Fiscal Responsibility Commission while also decrying rising debt stock recommended that the purpose of incurring debts be redefined, being for projects that will promote value chain development, improve the macroeconomic framework, develop infrastructure and build strategic human capital.

This, according to him will imply a removal of the amendment in Sec. 12 of the 2021 Finance Act which introduced an omnibus new term called as a justification for borrowing.

He also highlighted the need to establish a comprehensive accessible public record of all debts, period of amortisation, interest, the amounts so far repaid or used for service, outstanding sums, projects where proceeds have been deployed and the state of implementation or access to services,
etc; and stop borrowing for recurrent expenditure (personnel and overheads) and dilatory capital expenditure that adds no value to economic growth, wealth creation and development.

Regina Udo, Senior programme executive at OrderPaper Advocacy Initiative who equally spoke at the event said her organisation was engaging the National Assembly to advocate the implementation of the FRA 2007 Act at the national and sub-national levels as it relates to debt management and revenue remittances through the parliament’s public accounts committee.