THE FiscalResponsibilityCommission(FRC) hasahugetaskonitshands discharging its statutory responsibility of reforming the management of the nation’s finances. At the inception of the present administration, Vice President Yemi Osinbajo had disclosed that the nation’s debt burden stood at over $600billion.
It would appear that fiscal frugality and discipline have been observed more in the breach in recent years as the federal and state governments went on borrowing binges, both locally and externally, without restraint.
Today, too many states owe far more than their earnings can sustain. States like Lagos, Bayelsa, Cross River and Delta lead others in terms of exposure to debts. A Debt Management Office (DMO) report put the nation’s debt stock as at June 2012 at N1.86 trillion with local debts amounting to N1.185 trillion or over 70 per cent of the total debt burden. This is clearly unsustainable.
It is precisely to check this act of fiscal irresponsibility that the FRC was set up. The organisation is expected to set the standards of fiscal responsibility for all levels of government. It should set limits for foreign and domestic debts, and debt ratios vis-à-vis the budgets of the respective tiers of government. It should set timelines for the taking and repayment of loans, as well as track the uses to which the facilities are put in line with the terms and conditions for securing them in the first place.
That this is not the case presently means that there is a lack of fiscal responsibility in the country. A major problem, however, is the fact that the FRC has not been domesticated at the state level. If fiscal responsibility is to be taken seriously, it is necessary to set up fiscal responsibility commissions in the states with laws enabling them to carry out these responsibilities.
As presently constituted, the FRC can only bark, it cannot bite. Calls have been made for the executive and legislative arms of government to amend the Fiscal Responsibility Act (FRA) 2007 with a view to giving the FRC more powers. The Act, for instance, provides for offences but does not stipulate punishments. It denies the commission the power to prosecute or punish offenders. This is not good enough. We need to take fiscal responsibility seriously.
As part of the amendment to the FRA 2007, the status of the commission should be determined once and for all. Since states have co-ordinate powers with the Federal Government, the Commission as presently constituted may find it difficult to exercise its power over states. The Commission was one of the agencies of government that the Steven Oronsanye Panel recommended for scrapping. This may be one of the reasons it has been mostly tame in its activities. The time is ripe now to firmly determine its true status and relevance to the country in an era of transparency and accountability which democracy demands.
Considering the bad news emanating from the state and the federal levels concerning fiscal indiscipline, there is need for all tiers of government to be circumspect in their financial dealings. States, for example, must get federal government approval of their loans as was the case with the recent Edo State World Bank loan. It is also gratifying that President Muhammadu Buhari sought the consent of the Senate before the loan was approved.
We expect that in a properly empowered regime of transparency and accountability, the FRC would be involved in determining the appropriateness of loans and monitoring their administration to ensure that they are sustainable and repaid as due.
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