Center for Social Justice, Author at Centre for Social Justice

Retain The Fiscal Responsibility Commission By Kalu Onuoha Esq. Posted: Apr, 26 2014, 2:04PM By Kalu Onuoha Esq. The Fiscal Responsibility Act (FRA) which came into force in 2007 seeks to infuse prudence, transparency and accountability into the management of our public finance by inter alia checking excessive public borrowing and indebtedness. It lays down guidelines on how to strike a balance between governments’s proposed expenditures and revenue targets. Again, the law encourages inter-generational equity, savings as well as sustainable investments in human capital and physical infrastructural projects. The FRA’s elaborate provisions adequately cover the process of preparation of medium term expenditure frameworks (MTEFs) as well as the nation’s annual budgets. But all these may be at risk if the White Paper on the Oransaye Committee Report is implemented as it affects the Fiscal Responsibility Commission (FRC) which is the institution specifically established to oversee implementation of the FRA. Little wonder there is a nationwide groundswell of opinion against the idea of scrapping the FRC. The Oransaye Committee had erroneously suggested that the Revenue Mobilization, Allocation and Fiscal Commission (RMAFC) could take over the powers and responsibilities of the FRC, but no one within civil society had imagined that the Federal Government was going to buy into the idea, given the state of our public expenditure management system and the pivotal role being played by the FRC. There was no basis for taking the recommendation seriously. Therefore, it was a rude shock when the White Paper came out, and we began to see that the FRC has become a victim of the apparent absence of rigour in the work of the Committee. It would be recalled that the main focus of the Oronsaye Committee was the ballooning cost of governance and how to effect sustainable reduction through significant shrinkage of the public sector. In the event, the Committee reviewed the functions of a wide range of parastatals and agencies. But its recommendation on the FRC was wide off the mark. The Committee allowed itself to be carried away by the word “fiscal” in the names of the FRC and the RMAFC. The word “fiscal” misled the Committee into thinking that the two institutions perform the same functions and that the later can successfully implement the mandate of the former. Nothing could be further from the truth. There can be no doubt that drastic actions need to be taken to rein in our country’s wage-bill before expenditures spiral completely out of control. But with respect to the FRC, the Oronsaye Committee ended up advising us to cut our nose to spite our face or discard the dirty bathwater with one of our precious babies. The Government knows where the excess fat and pads are entrenched in the public sector. The FRC is a lean organization; killing it will in the long run yield more financial problems than its retention. After the euphoria of the immediate relief of marginal reduction in the cost of governance, the problem of fiscal indiscipline will return with a vengeance. It will certainly inflict more grievous collateral impact and at the same time spin off unintended consequences with respect to the ongoing reform of our public expenditure management system. Again, it is arguable whether the much cherished virtues of transparency and accountability will be guaranteed if the functions of the FRC are transferred to the RMAFC. This is because the later does not have the competence to take on the added duties, considering the herculean constitutional responsibilities it is grappling with. The Committee’s recommendation is counter-intuitive because membership and composition of the RMAFC do not predispose it to the tasks currently assigned to the FRC. The Chairman and members of the RMAFC are not required to possess cognate experience relevant to the work of the FRC. Again, there is no provision for ex-officio members from the Federal Ministry of Finance and other relevant agencies; also unlike the FRA, the law setting up the RMAFC makes no provision for representation of civil society and other professional bodies. The Governor of each State of the Federation simply sends a party member who may or may not have any cognate training or experience to the RMAFC. This is not good enough for sustenance and deepening of the reforms ushered in by the FRA. It is public knowledge that the RMAFC is a hidebound monolith comprising disparate politicians nominated without regard to the mandate of agency. Clearly, it is not in a good form to step into the shoes of the FRC, more so as it is also going to be saddled with the work of the National Salaries, Income and Wages Commission. We all know that the RMAFC does not have the capacity to handle the specialized functions of the FRC. What is required is a compact agency that is nimble, alert and responsive; not a clumsy hotbed of political maneuverings. Effectiveness should not be subordinated to financial efficiency. The FRA will become a hobbled and declawed bear without the FRC; the RMAFC cannot make a good foster parent. The law will be drained of its vitality, nurture and bite. The RMAFC has not shown that it has the capacity to handle the issue of revenue mobilization; neither has it acquitted itself creditably in the area of revenue allocation. Over the years, RMAFC has proved itself incapable of addressing the problem of leakages and accruals to the Federation Account. The NNPC and CBN face off is a case in point. The RMAFC has played little or no significant role in resolving the lingering controversy, either by supplying the information or otherwise. Adding more responsibilities will overstretch the competency of the RMAFC and compound its ineffectiveness. It must not be forgotten that the FRC is in the nature of anti-corruption institution, though specially dedicated to fiscal governance; it has powers of investigation and compelling evidence like the EFCC and the ICPC. It submits its reports to the Attorney- General of the Federation for prosecution. We cannot have too many anti-corruption agencies in Nigeria, just as we cannot have more than enough security and law enforcement institutions. It was perhaps in recognition of this, that those who prepared the White Paper declined to merge the EFCC, ICPC and the Code of Conduct Bureau (CCB), even as they also refused to scrap the Nigerian Security and Civil Defence Corp (NSCDC) and the Federal Road Safety Commission (FRSC). Further, policy flip-flop and regulatory inconsistency are at the heart of the continued poor performance of our economy. Abolition of the FRC will create uncertainty in the public expenditure management system. It will reinforce the perception that Nigeria is not serious with the reform, and that all the talk about commitment to the new order and the war against corruption are only meant for the international media. Undoubtedly, the move to scrap the FRC will constitute a setback, coming as it is at a time when the relevant ministries, departments and agencies (MDAs) are becoming acquainted with the oversight roles of the FRC. Again, the agency is beginning to develop working relationships with multinational financial institutions and development partners, therefore scrapping it now will send the wrong signals worldwide. It will take the RMAFC forever to familiarize itself with the functions of the FRC, learn the ropes and begin to deliver; we cannot afford the delay, not when year 2020 is around the corner. Abolition of the FRC will, certainly, leave the FRA in limbo and cosign it to a jurisprudential muddle. The FRA will have to be amended to delete the provisions relating to the FRC and substituting them with the RMAFC. On the other hand, the Constitution will have to be amended to expand the scope of the functions of the agency. The main losers in all this rigmarole will be our economy and the reform process which will be impeded. More poignantly, implementation of the White Paper will rubbish the heroic efforts of fiscal governance activists who goaded Obasanjo’s economic management team and the National Assembly throughout the process of conception, drafting, consultations, debate and eventual passage of the FRA. We are all aware that that a broad coalition of civil society (CSO) organizations championed the enactment of the FRA as one of the “sunshine laws” indispensable to an open fiscal governance. Civil society activists insisted on the establishment of an independent oversight agency as an integral component of the public expenditure management reform package in the aftermath of prolonged military rule with its attendant fiscal indiscipline and financial irresponsibility. Although the Attorney General of the Federation has transmitted his review of the Recommendations of the Presidential Committee on Restructuring and Rationalization of Federal Government Parastatals, Commissions and Agencies, otherwise known as the Orosanye Committee Report, implementation of the White Paper cannot be automatic. There is still a window for the President to revisit and reconsider the unacceptable idea of doing away with the FRC. It is an error of judgment that must be reversed, before the nation loses its credibility regarding the much touted fiscal governance reforms. Kalu Onuoha Esq. Abuja

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