Who We Are
Nigeria has had a long and chequered macroeconomic history. Beginning from the 1970s when oil windfalls were grossly mismanaged, the nation has over the years suffered the consequences of a series of poor economic management decisions and behavious during a prolonged absence of real fiscal rules. The subsisting fiscal environment was generally dysfunctional, and fraught with a poor savings culture, uncoordinated borrowing, poor access to fiscal records – which where unreliable in the first place, massive corruption in public circles, poor accountability, unrealiable forecasts and a badly fragmented budgetary system whose product was used more in the breach than in its compliance. This scenario resulted in economic volatility, inefficient public sector investments, debt overhang, poor service delivery and worsening socio-economic conditions of our citizens. With the return of civilian rule, however, the imperative of delivering qualitative and equitable democracy dividends imposed on the economy’s managers the burden of reversing this trend by initiating policies and rules that put the people and their long term interest at the centre of fiscal and public expenditure management.
One of such economic initiatives launched by the Obasanjo administration and vigorously sustained under the present administration is the reform of the fiscal responsibility regime. The signing of the Fiscal Responsibility Act on July 20, 2007 by President Umaru Musa Yar’Adua therefore marked a departure from the disjoined, ad-hoc and poor enforced policy environment for fiscal management to a new system enshrined in law and aimed at expenditure restraint. The novelty of this Act is that for the first time in history, we have a concise and focused legislative framework that regulates fiscal conduct, prescribes guidelines for the management of state revenues, imposes limitations on government spending and prohibits certain fiscal activities, such as some kinds of Debt securities and irresponsible borrowing by various tiers of government. The Fiscal Responsibility Commission as a creation of this Law is therefore committed to the reduction of fiscal deficits and building revenue surplus at all tiers of government by ensuring that revenue raising policies, effective resource allocation and debt management decisions are prudently and transparently undertaken in a manner that will secure macroeconomic stability and national growth.
The Fiscal Responsibility Commission was set up by the Fiscal Responsibility Act (FRA), 2007, Act No.31, enacted on the 30th July, 2007 by the National Assembly of the Federal Republic of Nigeria. The FRC was inaugurated by the Nigerian President, Umaru Musa Yar’Adua on April 4, 2009. The Act provides for the prudent management of the Nation’s Resources; ensure Long-Term Macro-Economic Stability of the National Economy, secure greater accountability and transparency in fiscal operations within a Medium Term Fiscal Policy Framework, the establishment of the Fiscal Responsibility Commission to ensure the promotion and enforcement of the Nation’s Economic objectives; and for related matters.
Our nation’s economic future and fiscal responsibility are directly linked. There is a tie between fiscal responsibility and financial prudence today and what the society can enjoy tomorrow. Facing up to both the short and long – term fiscal challenges, therefore, will help put the nation on a path to lasting prosperity and a rising standard of living. If, on the other hand, we fail to quickly address the preponderance of fiscal inefficiencies and wasteful spending in our systems, we will squander the only opportunity to get our finances in order, and I charge you not to afford to do that.
President Umaru Yar’ Adua
At the inauguration of FRC
PIONEER CHAIRMAN’S STATEMENT
“We shall give full meaning to the provisions of the Fiscal Responsibility Act to make Nigeria’s wealth useful to its citizens. From what I have seen, Members are loyal and committed to serve. We intend to carry out our assignments with diligence and firmness. We will do our duty with ill-will, fear or favour”
Alhaji (Dr) Aliyu Jibril Yelwa, OON
Pioneer Chairman, Fiscal Responsibility Commission