Fiscal Responsibility Act: CSOs Hail Move By NASS to Initiate Amendment

Ndubuisi Francis in Abuja

Civil Society Organisations (CSOs) have applauded move by the National Assembly, NASS, to commence the process of amending the Fiscal Responsibility Act (FRA), 2007, noting that such amendment would check corruption and plug revenue leakages in the Ministries, Departments and Agencies (MDAs).

They urged the 10th National Assembly to go beyond mere expression of commitment to actually achieve the desired objective of amending the FRA, unlike its predecessor, which failed to pass the amendment bill after several efforts by stakeholders.

The amendment targets empowerment of the Fiscal Responsibility Commission (FRC) to enforce the provisions of the law through sanctions on federal MDAs, especially with respect to lack of compliance with financial reporting standards, reckless misapplication of internally generated revenues and non-observance of due process in public borrowing.

In a statement made available to THISDAY, a cluster of CSOs led by OrderPaper Advocacy Initiative implementing the Growth Initiatives for Fiscal Transparency (GIFT), hailed the lawmakers for steps being taken to amend the very important law.

The statement jointly signed by the Executive Director of OrderPaper, Oke Epia and Faith Nwadishi, Executive Director of Centre for Transparency Advocacy (CTA),  urged the 10th National Assembly to see through the FRA amendment in order to bolster the efforts of President Bola Tinubu’s administration to reform the country’s public finance architecture.  

They recalled that while approving the 2024-2026 Medium-Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP) submitted by the president about three weeks ago, the National Assembly harped on the amendment of the FRA 2007 as one of the measures to check corruption, block revenue leakages and waste of scarce public resources.

They recalled that at the plenary on Thursday, the Senate and House of Representatives adopted the report of the Joint Committees on Finance, Appropriations, National Planning & Economic Affairs, and Local & Foreign Debts.
“After outlining its findings, the joint committee recommended, among others, that “the National Assembly commence the process of amending the Fiscal Responsibility Act (FRA, 2007) in order to enhance the agency’s ability to enforce fiscal responsibility and impose sanctions on erring corporations specifically, with regards to Sections 21 (1) and 22 (1) (2).”

“While noting that “a significant number of the federal government’s revenue-generating agencies engaged in arbitrary, frivolous and extra-budgetary expenditure,” the National Assembly joint committees observed that “most of the revenue agencies violate the Fiscal Responsibility Act 2007 due to the lack of punitive measures in the Act.”

“According to the report, some revenue-generating agencies, without recourse to the National Assembly, were involved in Joint Venture Agreements particularly, in the oil and gas, and power sectors, which has not only committed the Federal Government to a $40 million monthly TAKE OR PAY agreement but subjects Nigeria to huge international arbitrations,” the CSOs noted in the statement.

According to the CSOs, these agreements exposed Nigeria to an estimated N19.9 trillion in contingent liabilities between 2024 and 2026.
Based on this, the CSOs stressed that the National Assembly joint committees also recommended to plenary to “review the laws governing the activities of all such revenue-generating agencies under their purview in order to identify specific sections of clauses that need to be amended in order to plug waste and increase the government’s capacity to generate revenue.”

The CSOs commended the parliament on the move to review the laws governing these agencies, saying such will ensure compliance with extant financial reporting standards and block wastages and corruption in public finance.
They explained that the latest move by the legislature aligns with its objective and recent public awareness and stakeholder engagement efforts on needed policy reforms in public finance management.

Further according to the statement, “We believe that the amendment of the FRA will, amongst other things, address the issues of accountability, transparency, and lack of prudence in public finance, and also empower the Fiscal Responsibility Commission to stand up to its responsibility in checking wanton disregard for the provisions of the law by MDAs of the Federal Government.

“Through our GIFT Nigeria project, designed to catalyse reforms around Transparency, Accountability, and Good Governance (TAGG) vis-à-vis Public Finance Management (PFM) and supported by the United States Agency for International Development (USAID) under the Strengthening Civic Advocacy and Local Engagement (SCALE) project by Palladium, we have advocated vigorously for an amendment of the FRA 2007 to bring about enduring solutions to the public finance management challenges plaguing the country.

“We, however, urge the 10th National Assembly to go beyond mere expression of commitment to actually achieve the desired objective of amending the FRA, unlike its predecessor, which failed to pass the amendment bill after several efforts by stakeholders, including the GIFT cluster and civil society organisations to make it do so.”