In 2012, the Fiscal Responsibility Commission (FRC) demanded that NIMASA render audited accounts, but FRC's demands were blatantly ignored without any consequences. Taking from El-Rufai's words, what is the purpose of the FRC if it can only bark but not bite? With a 2024 budget of N1.42bn for a commission whose responsibilities are overlap with the Ministry of Finance, House of Representatives, and the RMAFC, it is imperative the commission is given necessary tools and backing to carry out its responsibility of ensuring fiscal responsibility in public finance.
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In 2007, when the FRA was enacted, Nigeria's external debt was $3.33bn; it has now over quadrupled to $42.12bn in 2024. One will wonder the purpose of this legislation as it is if our debt stock is on a meteoric increase. The Fiscal Responsibility Act (FRA) Amendment Bill is a crucial legislative proposal aimed at enhancing Nigeria's fiscal management framework and ensuring long-term economic stability through increased accountability and transparency of ministries, departments, and parastatals. As the nation grapples with fiscal deficits, high public debt, and economic instability, there is an urgent need to pass this amendment, as it is crucial to regulating and bringing sanity to public finance management in Nigeria.
Effective public financial management is essential for ensuring that government resources are managed efficiently and effectively. The FRA Amendment Bill aims to strengthen Nigeria's public financial management framework by introducing robust measures for revenue collection and reporting, fund management, and public finance management. Enhanced financial management practices will lead to better resource allocation by reducing wastage and improving service delivery to citizens.
The bill also promotes transparency and accountability in government finances. By mandating regular and detailed reporting on fiscal performance, it ensures that government actions are subject to public scrutiny. Greater transparency builds trust in government institutions and enhances the credibility of fiscal policies. One of the primary objectives of the FRA Amendment Bill is to instill greater fiscal discipline within government fiscal dealings. The amendment introduces stricter fiscal guidelines and empowers the Fiscal Responsibility Commission to enforce the law, which is essential for ensuring that government spending and borrowing are conducted responsibly. By imposing limits on fiscal deficits and public debt, the bill seeks to prevent unsustainable fiscal practices that could jeopardize Nigeria's economic future.
Nigeria stands at a crossroads, facing a critical choice between adopting prudent public fiscal management and continuing on an unsustainable path. The FRA Amendment Bill provides an opportunity to enforce prudent public financial management, and lawmakers must act swiftly to pass this bill, as time is not on Nigeria’s side. The enormous benefits of the bill and its importance in regulating fiscal operations and debt management have been addressed. It is our hope that lawmakers pass the bill and usher in a new future for the FRC, enabling it to function effectively to curtail wastage in public finance.
The Growth Initiative for Transparency (GIFT) Cluster, consisting of Civil Society Organisations led by OrderPaper Advocacy Initiative and comprising Centre for Transparency Advocacy (CTA), HipCity Innovation Centre, CLICE Foundation, and AdvoKC, supported by the Strengthening Civic Advocacy and Local Engagement (SCALE) project funded by the United States Agency for International Development (USAID), have been on an advocacy drive to nip in the bud the scourge of public finance mismanagement, lack of transparency, and debt mismanagement by advocating for the amendment of the Fiscal Responsibility Act (FRA) bill. This is another call to remind us that the FRA Amendment Bill is vital for addressing Nigeria's current fiscal challenges and setting the country on a path to sustainable economic growth. Lawmakers must recognize the importance of this bill and expedite its passage to secure a stable and prosperous future for Nigeria.