Nigerian Legislature must make cogent inputs in public finance architecture
Frivolous spending has been one character of the Nigerian Government which evidently has had its discomforting effects on the Country. The prevailing shortfall in revenue accruing to the Government coffers has presented situations before the Government, where it is struggling to meet financial obligations of recurrent, and at the same time satisfy appropriately, capital expenditure demands. The deficiencies have left no choice than to leave the Government being constrained to succumb to continuous borrowings. The sniffing for loans locally and internationally has raised comments in recent time as concerned statesmen have been making notations on the dangers that lie ahead the Country should the chains of borrowings keep on stretching to place the Country at reproachful posture.
Among the compendium of arguments as to the mind-boggling state of financial mess the Government is presently wallowing in, have been assertions questioning why the Government has refused to downsize the cost of governance by employing measures of frugalism. Arguments along this line have been justified on the ground that rather than resorting always to borrowing, such measure which would require structural overhauling of the prevailing system would naturally save the Country of overburdened fixtures of waste which characterised governance of the Federation. Hence, such funds going into unnecessary formations would be made available for meaningful projects which would cater for substantial capital needs, and thereby minimise the resort to borrowing.
The increasing resort to acquiring loans most recently have attracted reactions, as the debt profile of the Country is fast rising again. Just recently, the National Bureau of Statistics (NBS) had revealed that the domestic debt of Nigeria rose to N20.64trillion as of March 31, 2021 from N20.21trillion as at December 31, 2020, with the cost of servicing the Country’s debt from January to March this year standing at N993.5bilion. The breakdown of the report showed that a total of N612,712,626,144.40 was spent on domestic debt service while $1,003,409,940 (N380.79bn) was spent on external debt service payments.
It would be recalled that PricewaterhouseCoopers (PwC) Nigeria, had said in a recent report noted that the increasing cost of servicing debt has continued to weigh on the Federal Government’s revenue profile. The report had read: “Actual debt servicing cost in 2020 stood at N3.27tn and represented about 10 per cent over the budgeted amount of N2.95tn. This puts the debt-to-revenue ratio at approximately 83 per cent, nearly double the 46 per cent that was budgeted. This implies that about N83 out of every N100 the Federal Government earned was used to settle interest payments for outstanding domestic and foreign debts within the reference period. In 2021, the FG plans to spend N3.32tn to service its outstanding debt. This is slightly higher than the N2.95tn budgeted in 2020.”
According to data obtained from the Debt Management Office, the Country’s current debt profile hit N33.10 trillion as of the end of the first quarter of 2021. The figure represents an increase of N191billion compared to the N32.91trillion recorded in December 2020.
However, the request for loans seems never to be coming to close with the trend. The Senate President, Dr Ahmad Lawan, on Thursday promised that the National Assembly will follow due diligence in approving loan requests of the Executive arm of government. Ahmed who made the statement while speaking to State House correspondents after meeting behind closed doors with President Muhammadu Buhari at the Presidential Villa, Abuja, emphasised that the National Assembly will not frivolously approve loan requests from the Executive, stating that the legislature will always ask for details of such request before any loan is approved. He was quoted: “What I want to assure Nigerians is that we are not going to be frivolously supporting or approving loans for the executive arm of government. Whenever we have to approve any loan, we have to insist on the details of what projects will be funded by those loans. We’ll have to look at the conditions that are attached to the loans, they must be favourable conditions before we approve and we will be up to date with our oversight to ensure that what we have approved is directly deployed and on those projects that we have also approved for implementation. So, we will not be frivolous and will not take it lightly to just approve any loan. Our options are really very limited as a country. First, we don’t have the necessary revenues, Nigeria is poor, we shouldn’t deceive ourselves. Nigeria is not rich, given the circumstances we live in, given the challenges we have; our resources are so low; our revenues are so low, and, therefore, the option of not doing anything, just to sit because we have no money, we shouldn’t go for infrastructural development is not even an option worthy of consideration. You cannot keep the economy stagnant.”
While arguments have been raised that borrowing is a good measure to boost economic growth, it is evident that such positivity only comes to play where such funds are being channeled appropriately to well-defined parameters of the economy with prudent use of resources to achieved desired goals. Hence, well-defined systemic compendium of policies crafted with cogent plans governing the formulations and implementations must readily be on ground with concrete workable structures to achieve the desired objectives. Where there are lacuna(s), possibilities of failure are very much identifiable at hand according to the degree of such lacunas. The permissibility of such gaps has been an observable defecting character which has frustrated projects for which loans have been acquired to execute. The need for the National Assembly and all State Assembly to put their respective Executive organ on their toes with proper scrutiny in fulfilling their oversight function is essential. The principle of separation of power and check and balance which Nigeria subscribes to as a democratic state demands that power be used to check power to guide against abuse. It is thus, essential for the legislature in the Country to rise to the task of working in the best interest of the people they represent by putting the Executive arm in check where shortcomings are very much at hand, while at the same time making cogent inputs to guide against shortfalls in the character of public finance in the Country.
