Benchmarking Selected Nigeria’s Federal Ministries, Department and Agencies MDAs Using The Fiscal Responsibility Index (FRI) 2011-2013.
Fiscal policy is a tool used by governments to influence the direction of economic activities, with the goal of promoting economic stability, growth and development. Public finance in Nigeria has been characterised by the “common pool problem” where revenues are drawn from every part of the economy and from the larger population to fund expenditure programmes targeting narrow interest groups; thereby creating differences in benefits between the larger group of taxpayers and the smaller group of programme recipients. This creates abundant possibilities for huge free riders. In an effort to overcome this challenge, several fiscal laws and policies including regulations have been put in place since the return to civil rule in 1999. One of the sunshine laws is the Fiscal Responsibility Act (FRA) of 2007 which has been domesticated in several states of the federation.
Although fiscal responsibility is an economic concept, it can be seen from the Nigerian context as having the budget and the Medium Term Expenditure Framework (MTEF) anchored on high level national planning frameworks including Vision 20:2020 and its implementation plans; in other words, policy based budgeting….