Fiscal commission seeks support to fix loan limits for govt arms

TO check indiscriminate application for local and foreign loans by government at all levels, the Fiscal Responsibility Commission (FRC) has embarked on massive sensitisation for various public agencies and stakeholders in the financial sector to get support for its plan to fix limits for borrowing by public institutions.

The Commission describes such loans, which it alleged is responsible for several debts in the polity, as detrimental to fiscal prudence, transparency and accountability in governance, a situation it noted, contravenes the FRA Act, 2007.

“The FRA Act 2007 as stated earlier is characterised by fiscal rules and procedures formalising the budget process, fixing the levels of budget deficit expenditure and revenue limits as well as limits to the debts of the federal, states and local councils. Time limits are imposed for the performance of obligations of the stakeholders and budget process authorities and managers.”

The Commission also implores the legislative and executive arms of government to amend the FRC Act of 2007 to give it more powers.

The Acting Chairman of the Commission, Victor Chinemerem Muruako, stated these yesterday in a keynote address at a two-day awareness workshop on Fiscal Responsibility Act 2007.

The Commission was set up pursuant to the Fiscal Responsibility Act (FRA) 2007, Act No. 31 to among other things, reform the management of Nigeria’s public finance through regular monitoring of government’s financial activities, uncompromising investigation and public reporting, backed by a firm commitment to enforcement while creating an enduring framework for effective and transparent financial management in Nigeria in line with government’s agenda for transparency and accountability.

Muruako, who spoke extensively on the numerous challenges facing the Commission said, “Although the Act provides for offences, it does not stipulate the matching punishments. It denies the Commission the power to prosecute or punish the offenders under the Act. By implication, the FRC can only name the offenders. This amounts to mere reputational punishment as it does not deter people from contravening the provisions of the Act with impunity.”

He explained that the FRC sent a bill to the National Assembly to deal with the issue, but regretted that the bill is yet to receive the attention it deserves.

He noted that notwithstanding, within the short period of implementing the FRA Act 2007, the Nigerian economy has experienced growth and stability, stressing that the challenges facing the Commission calls for immediate solution.

Presenting a paper on, “An Overview of the Fiscal Responsibility Act, 2007” the Acting Head, Directorate of Legal, Investigation and Enforcement of the Commission, Charles Abana said that Nigeria operates a broken budget, which is signed into law some four months into the target financial year and often extends its budget to the month of March in the subsequent budget year in respect of capital expenditure. Despite the extension of the budget year, the performance of the capital expenditure is about 60 percent, stressing that this is partly explained by the government’s inability to comply with hard budget constraints or take strict fiscal decisions.