The Acting Chairman, Fiscal Responsibility Commission (FRC), Mr Victor Muruako, says there is considerable decline in fiscal deficit since the commencement and monitoring of the Fiscal Responsibility Act (FRA), 2007.
He said this last Wednesday in Abuja during a consultative visit by the Yobe State Fiscal Responsibility Board.
He added that the decline was a welcome development because growing deficit diverts capital from economically productive investments.
He said that due to the FRC’s strict enforcement and monitoring, Nigeria no longer adopted budgets based on over estimates of growth.
“Gone also are the days of unrealistic revenue targets which allows large deficits to be blamed on unanticipated macro-economic developments.
“The Federal Government now operates with a modicum of fiscal policy credibility and is now more committed to fiscal transparency.’’
He commended the Federal Government for managing prudently the fiscal risks facing the nation through the establishment of stabilisation funds such as the Excess Crude Account (ECA) and the Sovereign Wealth Fund.
The chairman, however, said that the Federal Government had been pursuing policies that were consistent with a reasonable degree of predictability about the level and stability of revenue and tax rates for future years.
Muruako said that considering that states and local governments receive at least 50 per cent of the federation allocation, the adoption of Fiscal Responsibility Legislation was imperative to ensure macro-economic stability of the nation.
“The implementation of the expenditure framework by the three tiers of government will enable the country to better manage volatile oil revenue, unemployment poverty, rising budget deficits and the insidious worm of corruption.’’
He commended the Yobe Government for enacting the law and establishing the board, adding that about 14 states had enacted their Fiscal Responsibility Laws.
He urged the board to be courageous in administering its duties, adding that there would be antagonism from various quarters in the state.
He also said that the board should bring about the needed change in the state and also raise funds for the government.
He pledged the commission’s support to the board, adding that it would give it the technical wherewithal to succeed.
The Yobe board’s acting Executive Chairman, Mr Musa Amshi, said that the two-day visit would help members familiarise themselves with the operations of the FRC.
He added that the state would, within one year, experience changes as a result of the establishment of the board.
“The impact of this commission is supposed to be felt before the end of this budget year.
“For the first time the state government is passing its Medium Term Expenditure Framework (MTEF) to the State House of Assembly.
“It is the first time that the state House of Assembly is requesting for seven documents to be submitted by the Ministry of Budget and National Planning.
“Also, the preparation of the budget involved everybody, including the Civil Society Organisations with their inputs.
“So the impact has started and I believe we will improve the resources of our state.’’
The Act was enacted to promote prudent management of the nation’s resources, ensure long term macro-economic stability and transparency in fiscal operations of the national economy.