Only 25 States Have Passed The Fiscal Responsibility Law – NGF 

The Nigeria Governors’ Forum (NGF) has disclosed that less than 25 states in the country have passed the Fiscal Responsibility Law. It also said that 30 state have passed the Debt Management law. The Director-General, NGF, Mr Asishana Okauru, said this while delivering a goodwill message at the Fiscal Responsibility Commission’s (FRCs) Stakeholders Dialogue on Implementation of Section 45 of the Fiscal Responsibility Act (FRA) in Lagos. Okauru, represented by Mr Olanrewaju Ajogbasile, Senior Programme Manager, NGF, said that states were also domesticating core principles of the FRA, regarding fiscal planning and management. He revealed that 15 states recorded an average monthly debt service that was less than 40 per cent of gross Federation Account Allocation Committee (FAAC) for 2021 financial year and total debt stock at the end of December 2021. According to him, although section 45 of the FRA is the premise of the deliberation, all sections of the Act or state’s FRL’s, are reinforcing of each other in terms of delivering fiscal sustainability across the tiers of government. “Unfortunately, certain flexibilities and a weak consequence system, renders full compliance a choice. “Likewise, fiscal planning has largely remained unrealistic due to paucity of requisite data, low Own Source Revenue (OSR), increase in permanent and development expenditures. “As well as the susceptibility to volatiles in FAAC, crude oil, inflation rate and exchange rate parameters, among others,” he said. According to him, the NGF Secretariat will continue to advocate as good practice the tenets and provision of the Act through its engagements, initiatives and discourse around fiscal transparency, accountability and sustainability. In a keynote address, the Secretary to the Government of the Federation (SGF), Dr George Akume, said that the dialogue was organised to promote the need for subnational to borrow through the right channels and for the right reasons. Akume, represented by Dr David Eze, Assistant Director, Finance and Account, OSGF, stated that the commission must adhere to laid down rules that ensure that government officials at all levels do not abuse the process of borrowing. He noted that governments across the world grow faster and better through very good and strong institutions, rules and regulations, hence the implementation of the FRA 2007 is worthwhile. The SGF stated that there was the need to urgently address some of the excesses and infractions of the FRA 2007, particularly with the banks. Akume also demanded for adequate machineries to effectively control and properly manage public resources, as public debt lowers the future generation’s well-being. He expressed worry that the private sector may be discouraged from investing in the states, if the government needs to service debt and also provide a satisfactory environment for investment in infrastructure. “Although, it is believed that the efficiency and equity benefit of borrowing by subnational government outweighs associated macroeconomic risk, factors such as lack of institutional capacity. “Also, quest to control subnational government impulse in running excessive deficit and the need to take their fiscal excesses in the area of borrowing cannot be overemphasised,” he said. According to him, systemic subnational insolvency may impede the growth of the capital market, deter fiscal space for infrastructure investment, threaten financial stability and core public services. Akume said that might create pressure on the Federal Government to provide financial assistance to ensure a continued provision of essential public services. The SGF insisted that a disciplined borrowing processes was needed to avoid the potential long-term consequences of subnational borrowings of fiscal sustainability and macroeconomic stability. He stated that FRA 2007 was enacted to ensure the coordination of the national economy policy between various tiers of government. The SGF expressed that the ACT also enables the monitoring of agencies that were off budget, but whose activities had significant impact on fiscal policies. He lauded FRC for organising the meeting at a time when the Nigeria economy is faced with key challenges. Akume said that the country needed to develop strategy on how to structurally reform the economy, move labour and economic resources from low productivity to high productivity sector. “The dialogue is justified, as the government is damning to get things right from the beginning to avoid mistakes that have dragged the nation into huge domestic and foreign debt. “Accordingly, this particular direction is to ensure that the nation follows the laid down rules and regulations, in order to ensure prudence, transparency and accountability in the management of public funds and also to depart from such practices that have left so much debt for successive government,”: he said. Earlier, the Executive Chairman, FRC, Mr Victor Muruako, said that banks and financial institutions in the country must ensure that their lending practices consistently comply with provisions of the FRA.  Muruako, a lawyer, said that to eliminate ambiguity, Section 45 (1) of the FRA, all banks and financial institutions shall request and obtain Proof of Compliance with the provision of the Act before lending to any government in the federation. Stakeholders at the dialogue include the representatives of NGF, Nigeria Deposit Insurance Corporation, Chief Compliance (NIDC) Officers, Chief Risk Officers, Chief Legal Officers and Chief Executive Officers of banks, among others.

IGR: FCTA Sets N250bn Monthly Target, Mobilises Agencies

The Federal Capital Territory Administration (FCTA) has mobilised its revenue generating agencies to improve its Internally Generating Revenue (IGR) to N250 billion a month. Mr Chinedum Elechi, Mandate Secretary Economic Planning, Revenue Generation and Public Private Partnership (EPRGPP) Secretariat, FCTA, stated this in Abuja at the weekend. Elechi told journalists after a meeting with revenue generating agencies that FCTA had the capacity to generate from N200 billion to N250 billion a month as IGR. “We think that FCTA has the capacity to do N250 billion a month, on a good day and that is the sort of target we are looking at. “We can even do N300 billion a month in some good periods. So that is what we want to work out. “However, in trying to grow revenue, it will also have a human face, because we are going to be dealing with issues of multiple taxation, so things are going to be streamlined. “We are going to make sure that taxation has a human face,” he said. Elechi stressed the need for the citizens to perform their civic duty of paying their taxes as at when due. He explained that the meeting was to find ways to improve IGR in FCT, which he said was pivotal to the aspiration of making Abuja one of the developed capital cities of the world. Elechi said that the meeting was necessary for all the revenue generating agencies to be on the same page and work as a team towards tapping the full revenue potential in the FCT. Describing the meeting as “exploratory”, the secretary stressed the need to lay down some strategies on how to improve IGR. He added that oil revenue was no longer sustainable, stressing, “for us in the FCT, the fall back is the IGR, and we have to work together to make a difference. “The goal is not just to harness what we have but also to improve it. This means that the more we grow our revenue, the better it will be for all of us. “The message is that every person in this room has a responsibility to generate more revenues for the FCTA.” Elechi reminded the revenue generating agencies that their mandate based on the renewed hope agenda of President Bola Tinubu was to grow IGR. He assured the agencies that the secretariat would find ways to incentivise performance by agreeing on certain percentages that would go to agencies based on what they generated. “We have all agreed that we are going to work in synergy for the purpose of growing the IGR of the FCT. “This is key because revenue is everything. Without revenue, without income, FCTA will not be able to deal with development issues that require funds. “The Minister of the FCT, Mr Nyesom Wike has made it clear that he is prepared to run the FCTA with IGR and whatever comes from the federation account will be extra,” he said. On blocking revenue leakages, the secretary said that the agencies would work together in synergy to ensure that all revenue due to FCTA goes to the FCTA. Earlier, the Director, Administration and Finance, EPRGPP, Mr Prospect Ibe, explained that the objective of the meeting was to interact, document challenges and suggest ways forward. The goal, according to him, was to enable FCTA to achieve its mandate. During the interactive session, Dr Babagana Adams, Director, Department of Outdoor Advertisement and Signage, said that the department generated N3 billion in three years and expressed commitment to improve revenue generation. Also, Alhaji Dan Maradin, Head of Commerce, FCT Water Board, said it had increased its revenues from an average of N1.5 billion annually to over N2 billion. “We were hovering around N150 million to over N300 million monthly,” he said. On his part, Alhaji Malik Tukur, Director, FCT Inland Revenue Service, stressed the need for inter-agency collaboration as against working in silos. Tukur said that FCTA would generate more revenue with strong collaboration among revenue generating agencies.