The challenges of public finance wastages and pervasive corruption have remained big. In this interview with TOLA AKINMUTIMI, the Executive Director of the Civil Society Legislative Advocacy Centre (CISLAC) and Head of Transparency International (Nigeria), Auwal Ibrahim Musa (Rafsanjani), speaks on how these challenges could be addressed to achieve sustainable national development. Excerpts:
Sir, the Fiscal Responsibility Act provides that all tiers of government should be fiscally prudent to ensure national development. How would you rate the federal, states and local governments’ compliance level with this legislative requirement?
We must recall that the challenge of corruption in Nigeria’s public sector resulted in the enactment of the Fiscal Responsibility Act 2007 which aims at providing for prudent management of the nation’s resources, ensuring long-term macro-economic stability of the national economy, securing greater accountability and transparency in fiscal operations within the Medium Term Fiscal Policy Framework, and the establishment of the Fiscal Responsibility Commission. Corruption and mismanagement are uncommon in the vocabulary of financial management at all levels. This same systemic corruption breeds loopholes that give free access to financial mismanagement and diversion. If we look critically, we would observe that the budget is where perpetration of corruption is rampant. There exists institutionalized mismanagement of public funds across Ministries, Department and Agencies, especially at state and local government levels with huge figures appropriated in the budget and no corresponding capital investments to show for it. We are worried that the Fiscal Responsibility Commission which is a body responsible for ensuring fiscal responsibility and the due implementation of budgets and projects is inefficient in fulfilling its responsibility. Attempts to implement the Act has been majorly at federal level. This is grossly deficient given the fact that states and local governments control over 50 percent of nationally-shared revenue. Also, despite the provision of the Act mandating every government agency to establish a general reserve fund where 20% of its operating surplus is allocated annually while the balance is to be paid into the Federal Government’s Consolidated Revenue Fund, there are reports that they regularly under-project their revenues and over-estimate their expenditures thereby ensuring that their remittances to the Consolidated Revenue Fund are minimal or nothing is remitted at all.
According to statistical data on yearly expenditures at all levels of government, Nigeria today remains one of the most poverty-stricken nations globally. How do you think Nigerians can get more value for taxes and other contributions they make every time to keep the country going?
Despite increasing revenue base in the country, the rate of poverty, unemployment, high rate of inflation, low capacity utilization in industry, debt overhang, deterioration of economic activities still prevail for lack of judicious utilization of taxes to effect changes across critical sectors that will benefit the common citizens. We are concerned that resources from taxation and other sources are not judiciously deployed to improve infrastructure facilities and standard of citizens, especially at state and the grassroots. A good tax system is characterized by certainty, efficiency, full compliance with the rule of law, equity and fairness to all, all-inclusiveness and reciprocity in the use of tax revenue. The level of tax compliance in the country is low because citizens do not feel the impact of taxes they paid. There must be a tax justice system, where eligible tax payers will be willing to remit taxes when they see projects executed with the taxes. It is a demand and supply system. Also, government must embrace radical reforms to address the problems associated with Politically Exposed Persons (PEP) in the award of contract, needless Illicit Financial Flows and tax holidays to multinationals.
The present government continues to say that our borrowing to GDP ratio remains within globally accepted threshold. But then, the Fiscal Responsibility Act cautions against excessive borrowing as we seem to have now. What is your reaction to this issue?
Well, fundamentally, public debts are necessitated by the need to finance rising government expenditure, financing for government budget deficit and increase socio-economic responsibilities, among other necessities. There was a shocking report last year that Nigeria borrows N10trn in 30 months. We are worried that such whopping debt has not been used to transform the economy. You see, it is not about borrowing, but to what extent are these borrowed funds utilized in transforming the economy. Otherwise they can further cripple the economy for the present and future generations. Nigeria enters into debt traps as a result of deteriorating commodity prices, inappropriate economic policies, poor debt management capacity that adversely impacted on the country’s growth and development. Despite the provision of Section 42 of the Fiscal Responsibility Act which mandates the president to set overall limits or debt ceilings for the amount of consolidated debt of the federal and state governments, subject to approval of the National Assembly with Fiscal Responsibility Commission warning against non-compliance in excessive borrowing or spending, there are continuous violations of the provision. The problem is that the negative impact of excessive borrowing on Nigeria’s economic growth hardly comes to the mind of the policy makers at the point of contracting loans. Although borrowing to finance government expenditure is not bad in itself but the mode of servicing the debt, what the debt is spent on and a host of other issues relating to Nigeria’s borrowing level should be a major concern to all.
As one of the leading advocates of transparency and accountability in Nigeria with CISLAC being the face of Transparency International, what do you think is wrong with the current anti-corruption crusade of the President Buhari-led administration in view of Nigeria’s 2018 Corruption Perceptions Index rating?
The 2018 Corruptions Perceptions Index (CPI) released globally by Transparency International reveals that Nigeria has neither improved nor progressed in the perception of corruption in the public administration in 2018. Nigeria is thus still perceived as highly corrupt, and although the ranking shows that Nigeria moved up four places, it only means that four other countries have scored worse while Nigeria stagnated. It would be recalled that in February 2017 when the Corruption Perception Index (CPI) was released, some challenged the results and stated that it did not reflect the situation in the country, while others agreed that corruption has truly eaten deep into the Nigerian system and that the score was a true reflection of the state of corruption in Nigeria. Given the lack of progress in the fight against corruption as testified by 2018 edition of the CPI, the latest Index was a consequence of partial or non-implementation of recommendations issued by corruption experts and activists. There were recommendations that accompanied the launch of the CPI 2017, one of which was for the immediate appointment and prompt inauguration of the National Procurement Council (NPC) as provided in the Public Procurement Act. Another recommendation urged the Federal Government and the Legislature to strengthen anti-corruption institutions and provide adequate protection and encouragement for whistleblowers. The confirmation of 60 nominees for leadership positions across various institutions, including agencies vital to fighting corruption continues to suffer delay, which has continued to undermine governance and complicate the fight against corruption in the country. With the inability of the present administration to stop political boycott of key appointments and pass the much needed legislation such as the Proceeds of Crime Bill and to implement the recommendations given at the launch of the CPI 2017, it is no wonder that Nigeria’s score in 2018 is hardly better than 2017’s.
Could you comment on agitations by Nigerians on the need to reduce significantly the size of the National Assembly or at best make Legislative positions part-time in order to reduce governance cost?
As the country suffers from economic recession, many well-meaning Nigerians have advised governments across the three tiers to reduce the cost of governance so that more resources could be channelled towards development projects that impact positively on standards of living. Of course, we must bear in mind that for any society to make progress, there must be a government to run its affairs. But citizens would perceive government as a burden when its recurrent expenditure is repeatedly higher than its capital expenditure, which should impact positively on the economy, especially in the critical sectors. High cost of legislation remains a serious challenge confronting the country.