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Market Digest Nigeria

Finance

Nigeria attempts to implement the Fiscal responsibility

debt

Fiscal Responsibility Act impossible without states’

fiscal

Nigeria’s attempt to implement the Fiscal Responsibility Act will be difficult to realise without fiscal discipline in the states.

Chairman, Fiscal Responsibility Commission (FRC), Mr. Victor Muruako, made this known in Abuja yesterday during the opening of a five-day training for the Benue State Fiscal Responsibility Commission.

Muruako said: “It will be near futile to faithfully implement the Fiscal Responsibility Act at the federal level without instilling fiscal discipline in the states.”

To begin with, the futility of implementing the Fiscal responsibility Act, Muruako insists, is compounded because the revenue allocation formula places 48 per cent of the federation revenue with the Federal Government while 52 per cent goes to states and local governments.

He added: “When you add the Internally Generated Revenues (IGRs) of states and local governments to their allocations from the Federation Account, their relevance become even more pronounced.”

Muruako warned that subnational governments could not be overlooked or neglected in the desire to harness the benefits of managing public revenue, spending and debt.

According to the FRC chief, “when macroeconomic management is mentioned, people tend to think of it as the sole responsibility of the Federal Government, with the Minister of Finance as the arrowhead. While that is not altogether false, it needs to be seen and acknowledged that the collective fiscal activities of states and local governments outweigh those of the Federal Government”.

Muruako said the FRC is committed to partnering states and local governments to strengthened the fiscal responsibility ecosystem in Nigeria, adding that states and local governments are indispensable in achieving positive outcomes in key indices of economic development, including macroeconomic stability, debt sustainability, accountability, transparency and sustainability, among others’’.

“To work hard at controlling unemployment, inflation, security, transparency, accountability, sustainability, macroeconomic stability, etc without a commensurate commitment of states (in particular) and local governments is like mopping the floor with the tap running”.

While calling on state governments that were yet to conclude the enactment of fiscal responsibility laws and establishment of independent FRCs to do so, Muruako praised the Benue State governor for signing the Benue Fiscal Responsibility Bill into Law.

He said the Benue State Governor Samuel Ortom apart from setting up the Commission, also okayed the training.

He stated that the exercise by the Benue FRC is a “product of the efforts and engagements of our Commission with state governments and other key stakeholders over the years”.

Also, the Acting Chairman, Benue State FRC, Mr. Igyuse Yahuza, said his team was in Abuja to learn how FRC works and  apply it in Benue.

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