News is timeless

FRC Seeks Debt Limit for FG, States

•Stakeholders want quick review of FRA to check loopholes in public finance

0

The Fiscal Responsibility Commission (FRC) has called for the immediate passage of the amendments to the Fiscal Responsibility Act, 2007 (FRA, 2007) and the setting of a debt limit for both the federal and state governments.

 

The FRC Chairman, Victor Muruako said this became necessary to stem the worrisome trajectory of debt accumulation at all levels.

 

Speaking at an interactive session in Abuja, yesterday, under the Growth Initiatives for Fiscal Transparency (GIFT) Nigeria, organised by OrderPaper Advocacy Initiative in collaboration with other stakeholders, Muruako stated that there was an urgent need by the National Assembly to conclude the amendment of the FRA, 2007, to check loopholes in the public finance management (PFM) system.

 

He said: ‘’We are calling on finance committees in the 9th Senate and House of Representatives to, as a matter of fact, accelerate the amendment and passage of the FRA Act, 2007 before they wind down their sessions come 2023.

 

“This is because, there are several loopholes in the current Act that has made government vulnerable to massive looting, corruption and even freedom to borrow without necessary steps followed. There is no doubt that if they fail, there will be business as usual across the MDAS (Ministries, Departments and Agencies), which may further worsen the rate of national development.’’

 

The challenge of remittance compliance is specific to the Act which seeks to provide for prudent management of the nation’s resources, ensure long-term macro-economic stability of the national economy.

 

He regretted the nonchalant attitude of MDAs towards the remittance of public funds, capitalising on the gaps in the FRA, especially the lack of sanctions for non-compliance.

 

According to him, a review of the Act with specific sanctions for failure to remit revenues would compel public officer holders to sit.

 

The FRC Chairman disclosed that the Act identified 50 offences/violations, yet did not provide sanctions to punish offenders.

 

Describing the FRA as a peculiar Act, Muruako noted that besides covering some issues on PFM like the Medium-Term Expenditure Framework (MTEF) upon which annual budgets are anchored, it also sets thresholds for debt/borrowing at federal and state levels.

 

In his contributions, the FRC Director, Legal, Investigation and Enforcement, Chukwyemeka Charles Abana expressed regret that the Commission was not getting the needed support from sister agencies towards actualising the amendment of the Act.

 

He lamented that the Act had undergone three amendments already which were done piecemeal with the government cherry-picking areas that suited its purpose and situations.

 

Addressing the forum, the Executive Director, OrderPaper Advocacy Initiative, Mr. Oke Epia said the FRC which was established pursuant to the Act however, has some gaps that had significantly prevented the successful implementation of the law by the Commission.

 

According to him, “These gaps are summarised largely by a lack of mechanisms for enforcement of the law, especially in terms of punishment for default and violation, without the powers to impose and enforce some form of sanctions on public entities and individuals that deliberately fail to comply with the FRA as enunciated by the statutory guidelines of the FRC, the commission can be considered a toothless bulldog whose stipulations can be neglected without consequences.”

 

He noted that all the necessary steps enunciated by the Act in the areas of borrowing of foreign loans were not also adhered to by agencies of government, all of which had led to fiscal indiscipline, and massive looting of the nation’s treasury by heads of the agencies.

Culled from THISDAY

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More