The Fiscal Responsibility Commission [FRC] has advised President Muhammadu Buhari to set borrowing limits for the three tiers of government. It said the move will check indiscriminate borrowing by the three tiers of government in the country.
Its Acting Chairman, Mr. Victor Muruako said such limits would enable the Commission raise the alarm when any tier of government borrows or is about to borrow beyond the threshold set down.
Muruako spoke yesterday in Abuja while delivering the keynote address at a two-day awareness workshop on Fiscal Responsibility Act, 2007.
According to him, “where fiscal responsibility is practised, limits are imposed on deficits, debts and expenditure while time limits for performing certain duties and obligations are further spelt out.”
He warned that debts could get out of control without proper checks and limits.
He urged Buhari to visit those who have bypassed established laws for selfish reasons with appropriate sanctions. He said: “The problem has remained that over the years, successive governments have been selective on which programmes to follow thereby allowing their personal interests to overshadow the natural collective will to progress in line with other countries.”
He also disclosed that the commission had ensured that agencies of government remitted over N366 billion operating surplus into the consolidated revenue fund (CRF) since it came into operation.
As a first step, the FRC has embarked on massive education and sensitisation of government and public stakeholders in the financial sector to drum up support for the need for setting up of a “proper standard” in fixing limits for borrowing by the three tiers of governments.
The Commission expressed concerns over reckless borrowings which it said is responsible for several debts over-hang in the polity. This development, he argued is detrimental to fiscal prudence, transparency and accountability in governance, adding that it also ran foul of the FRA Act, 2007.
Muruako noted that the the FRA 2007 “is characterised by fiscal rules and procedures formalising the budget process, fixing the levels of budget deficit expenditure and revenue limits as well as limits to the debts of the federal, states and local governments, time limits are imposed for the performance of obligations of the stakeholders and budget process authorities and managers.”
He lamented that the Act setting up the commission “provides for offences, it does not stipulate the matching punishments, it denies the commission the power to prosecute or punish the offenders under the Act, by implication, the FRC can only name and shame the offenders, this amounts to mere reputational punishment as it does not deter people from contravening the provisions of the Act with impunity.
”This Commission has been a been a victim of this due to the fact that by the letters of FRA 2007 we are only to investigate and forward reports to other authorities without the necessary powers to prosecute. We are still battling to have these aspects of the law amended to enable the Commission have the necessary bite against the violators of the act.”
Muruako challenged state governors, particularly the newly elected ones to put in place fiscal regimes in their respective states to show transparency in the handling of public resources. He noted that only 12 states have so far subscribed to the Act, stressing that most state governors were not interested in replicating the FRA in their states.
He said the economy has recorded significant growth and stability over the years in spite of the challenges holding back the commission.