Who is afraid of Fiscal Responsibility Commission?
The recent pledge by Abdulmumeen Jibril, chairman, House Committee on Finance, that the National Assembly will continue to advise the executive against implementing the Stephen Oronsaye report on the rationalisation of Federal Government agencies as it concerns the Fiscal Responsibility Commission (FRC) has again put on the front burner the controversial recommendation. Oronsaye recommended scrapping the commission or merging it with another agency.
The FRC is a creation of the Fiscal Responsibility Act 2007 which began life in an executive bill during the Olusegun Obasanjo presidency. It received presidential assent in June 2007 when President Umaru Musa Yar’Adua signed it into law. It is an Act to provide for prudent management of the nation’s resources, ensure long-term macro-economic stability of the national economy, secure greater accountability and transparency in fiscal operations within the Medium Term Fiscal Policy Framework; and the establishment of the Fiscal Responsibility Commission to ensure the promotion and enforcement of the nation’s economic objectives, and for related matters.
The commission’s functions include: (a) monitor and enforce the provisions of this Act and by so doing, promote the economic objectives contained in section 16 of the constitution; (b) disseminate such standard practices including international good practice that will result in greater efficiency in the allocation and management of public expenditure, revenue collection, debt control and transparency in fiscal matters; (c) undertake fiscal and financial studies, analysis and diagnosis and disseminate the result to the general public; (d) make rules for carrying out its functions under the Act; and (e) perform any other function consistent with the promotion of the objectives of the Act.
Under the leadership of its pioneer chairman, Aliyu Jibril Yelwa, the commission had a befitting mission statement based on its statutory mandate: “To reform the management of Nigeria’s public finances through regular monitoring of government financial activities, uncompromising investigation and public reporting backed by a firm commitment to enforcement”. The agency envisioned “a transparent and effective government financial management framework for Nigeria”.
In plain words, the FRC is meant to enhance service delivery, poverty eradication, guarantee adequate standard of living, and promote sustainable economic growth, good governance and the institutionalisation of democracy. The Act seeks to make the nation live within its means, institutionalise expenditure planning, ensure borrowing only when necessary and being accountable, transparent and open, encouraging popular participation, planning fiscal activities in a logical manner, maintaining fiscal discipline, promoting strategic priorities and delivering value for money, among others.
As some analysts have suggested, the inability of our country’s successive governments and fiscal policy managers to manage the wealth of the nation with prudence and international best financial practices is implicated in the lack of shared prosperity and widespread despondency.
The commission’s achievements to date provide ample justification for its continued existence and encouragement. A few examples will drive home the point.
In the area of growing the Consolidated Revenue Fund, the commission has succeeded to a large extent in instilling a new regime of fiscal prudence and accountability among MDAs, encouraging them to comply with existing rules on the management of internally-generated revenue (IGR). Available data confirm that the cost of running the FRC in the last five years is N3.520 billion compared to the revenue of N259.586 billion the commission compelled the MDAs to pay to the government’s coffers.
With respect to project monitoring, reports of the FRC frequently identify bottlenecks to project implementation on schedule. For example, the commission recently identified non-release of funds as the main reason hindering the completion of the N4.31 billion Ingawa-Dallaje Dam in Katsina State. Lack of effective project supervision, inadequate design and bills at the time of award of the project and equipment vandalism are other factors affecting the early completion of the dam. The project, which was awarded in November 2009 with a completion period of two years, was reported to have attained only 50 percent completion in five years.
The FRA 2007 empowers every citizen to participate in enforcing its provisions. Thus, it provides that “a person shall have legal capacity to enforce the provisions of this Act by obtaining prerogative orders or other remedies at the Federal High Court, without having to show any special particular interest”.
It would be a disaster if President Goodluck Jonathan wants to go down in history as the Nigerian leader who sabotaged the full implementation of a law with immense potentials for promoting democracy in our time.