.Urges speedy FRA Act reform
The Fiscal Responsibility Commission (FRC), has urged revenue agencies to pay up over N1.5trillion outstanding operating surplus owed the government, saying the amount will go a long to reduce Nigeria’s loan targets in the current challenging economic situation.
Indeed, this amount is about 11% of the Federal Government’s 2021 N13.6trillion Appropriation Act, tagged: “Budget of Economic Recovery and Resilience”, and covers almost 50% of the N3.124trillion proposed for debt-servicing, which has become a recurring national discourse giving the growing concerns on debt sustainability.
If operating surplus owed is paid, it is more than enough to cover the entire N982.73billion Supplementary Budget signed into law in July.
The Executive Chairman, FRC, Victor Muruako, made the call at 3-day Capacity Building Programme organised for the Nigerian Shippers’ Council (NSC), which ended in Lagos last weekend.
“This is a call on the Nigerian Shippers Council and indeed other Government Owned Enterprises to wake up to the challenge of the payment of operating Surpluses,” he said. “The Commission will no longer entertain excuses from agencies. Some agencies audaciously claim that when they generate funds, it is for them to share or spend frivolously.”
This comes even as the Commission also urged for the speed up the FRA, 2007 amendment by the National Assembly, as this will “remove the defects therein and strengthen it for more effective implementation.”
FRC argued that the Nigerian economy has experienced a reasonable degree of growth and stability, which can be sustained and improved upon through the reform of the law.
Murako, in his welcome address at the event also assured that the Commission will continue to name and shame agencies that refuse to change, while acknowledging those performing responsibly, noting that in the case of the Shippers’ Council, there is an on-going reconciliation of liabilities by both parties.
This is a call on the Nigerian Shippers Council and indeed other Government Owned Enterprises about 31 of them to wake up to the challenge of the payment of operating surpluses, he added.
The training programme themed: “Enhancing the effectiveness of Nigerian Shipper’s Council Revenue Performance through improved understanding of the Fiscal Responsibility Act 2007,” the Chairman explained, will help minimize organisational weaknesses and attendant losses.
The Commission will no longer entertain excuses from agencies. Some agencies audaciously claim that when they generate funds, it is for them to share or spend frivolously.
Describing the FRC as “a child of necessity”, Murako recalled it was birthed due to a myriad of economic challenges. These include: poor and decaying infrastructure; epileptic power supply, weak fiscal and monetary policy; and fiscal dominance of credit to the public sector.
Others are pervasive rent seeking behaviour by private and public agents including corruption; weak institutions and regulatory deficits; policy reversals and lack of follow-through; inordinate dependence on the oil sector; disconnect between the financial sector and the real Sector; exchange instability and a host of others.
Despite this plethora of issues, Murako said the Commission has recorded a number of successes including over N1.57trillion paid into the Federal Government’s Consolidated Revenue Fund (CFR) as Operating Surplus, and reducing government deficit budget to sustainable level of less than 3% of the gross domestic product (GDP) up till 2020.
Additionally, he said FRC has brought about “Reform of the budgeting process through the implementation of the Medium Term Expenditure Framework (MTEF). Agencies are compelled to make three years development plans upon which its operations will be funded to ensure sustainability and continuity.
This is accompanied by public participation in the preparation of the MTEF and the annual budgets, where civil society organisation (CSOs) and the general public are allowed to critic the budget proposals and make contributions where necessary.
With about 18 states establishing their own Fiscal Responsibility agencies, FRC provides technical assistance to states and local governments to enable them enact Fiscal Responsibility laws and bye-laws to institute fiscal discipline in how government revenues including public funds and taxes are managed at each level.