The Chairman of the Fiscal Responsibility Commission, Alhaji Aliyu Jibril Yelwa has raised alarm at the spate of the foreign and local debts being incurred by the three tiers of government in Nigeria.
In a paper presented at a meeting for planning and advocacy on Fiscal Responsibility organizsd by the UNDP at the UN House in Abuja yesterday, Yelwa said such unwholesome debt profile posed a veritable management and institutional challenge to the implementation of the Fiscal Responsibility Act.
Yelwa particularly singled out the states for flagrant violation of the law in the area of borrowing, especially through floating of bonds and sales of treasury bills. Said he: “Some state legislatures are being stampeded to approve borrowing by government that have less than two years to go…even when what they borrow may have to be repaid in the next ten years”.
On its part, Yelwa said the Commission had written to all financial institutions i.e banks, Security and Exchange Commission, Debt Management Office, etc drawing their attention to the provisions of the Fiscal Responsibility Act 2007 as it relates to government borrowing.
He called for concerted efforts by all stakeholders to determine our total debt profile before further borrowing can be encouraged.
Yelwa also appealed to donor support agencies to assist the Commission in fast tracking “inter-Agency collaboration” so as to determine the local debt profile of the three tiers of government before the end of the 2nd quarter of 2010, adding that this will control the spate of borrowing based on informed data.
In the same vein, Yelwa also frowned at the fact that state and local governments are yet to buy themselves into the Fiscal Responsibility Act.
He said that the notion that the Act is only applicable to the Federal government was wrong.
He also said the novelty of the Act makes the implementation of the Fiscal Responsibility legislation at the states and local government daunting, especially as the state and local governments lacked technical capacity and legal framework for fiscal discipline. In addition, he added, they do not have the existing models and templates, records, processes or examples on which to build.
The cheering news is that the Commission is more than willing to guide and assist operators of public financial management on their responsibility as provided for under Section 54 of the Act.
This mind-set, he added, may hinder the effectiveness of the Act when it is realized that state and local governments control over 48 percent of the nationally shared resources.
According to Yelwa, the state governments are all bound by the provisions for the preparation of the Medium Term Expenditure Framework, Savings and Assets Management and the excess Crude Account, Debt and indebtedness and borrowing.
Yelwa advised that when Fiscal Responsibility Law is enacted by the states, there should be a Debt Management Division within its framework. He called for an independent source of funding for proposed Fiscal Responsibility Commission at the state, adding that “ a specific percentage of the state budget i.e. 05% could be given as budgetary provision to the Agency”. This, he added, is the only means by which it could be independent of the Executive and execute its functions without fear or favour.
He added that most of the fiscal performance reports submitted by the agencies were riddled with material inconsistencies, over spending, under spending under utilization of funds, misapplication of funds, revenue sub-optimality, outright revenue leakages, etc. Some of the responses, he added, fell short of the standard and world best practices in financial and accounting reporting system.
Yelwa said the Commission, having observed some lapses in the 1st quarter Budget Implementation Report, 2009, has now designed a format which it has forwarded to the appropriate quarters, adding that the Commission will soon under take on-the-spot visits to physically verify and confirm actual existence of projects.
Alhaji Yelwa said despite the enormity of the task, the commission was undaunted, adding that it will soon convene a stakeholder’s forum to address issues of leakages in revenue collection, spending inefficiencies, management of public funds, borrowing and other abnormalities.
He stated that for the first time in history, we now have a concise and focused legal framework that regulates fiscal conducts, contains guidelines on the management of government finances, imposes limitations on government spending, and borrowing.
Any breach of the provisions of the Act is liable to prosecution. He said that the Act also criminalizes all acts of slothfulness in the course of budget preparation, implementation, monitoring, and reporting as well as immunity from operators that hitherto were covered under locus standi.
Section 51 of the Act states as follows: “A person shall have legal capacity to enforce the provision of this Act by obtaining prerogative orders or other remedies at the Federal High Court without having to show any special or particular interest”.
God will save Nigeria and Nigerians from the hands of the borrowers. why are we borrowing when we have more $40bn in External Reserve and Many $BN in Excess Crude Oil Account. There is no problem if we can see and feel the impact of this government. What are they really doing with the money when the cannot implement 2009 Budget. is it not a shame to a government Implementing less 40% of the budget to be borrowing? Your Excellency President Yar adua, think of it and save Nigeria from the Global shame and embarassment.
I think before the end of 4 years tenure for this government, we will all clap hands for Baba Sege Obasajo as the best President Nigeria has ever produced. We better call Obasajo back to Aso Rock before it it too late.
It’s proven true. Nigeria politicians are greasy dirty greedy fools.
What Else Do We Want Again?
Goat In Goat Out
Cow In Cow Out
Fool In Fool Out
Loot In Loot Out
Thats Nigeria Own Tragedy.
No Amount Of Money Our Politician Looted Can Make Them Better Than Us.As Far As You Are A Nigerian You Are A Poor Man.
Until Every Nigerian Have Access To The Basic Neccessities Of Life,All Nigerian Are Poor.
@bala, how is patrick an igbo man?why calling ojukwu and co?check names before commenting dont shoot off point…we shld tackle corruption,starting from obj who gave us fraud election and do or die…also jail iwu life jail..ibb,atiku,ibori,orji all shld be gage then things will be good again
Bala I do not know where you are comming from? You got me wrong completely. We have have had, very fantastic rulers and great patriots from the north, people like the late and very honourable Saduana of Sokoto, the late and very honourable Tafawa Balewa, the late and very honourable Ribadu, the late and very honourable Yar’Adua, the late and very honourable Aminu Kano, etc. the list is endless. These people are some of, the founding fathers of our great nation and they made all of us proud. We have people from the north, who are great state’s people and with very impecable records, competent and honest leaders, like Alhaji Balarabe Musa, Alhaji Maitama Sule, Dr Tarhil, etc and the list is also endless. I have been priviledged, to meet with some of these people and i can tell you that, they are amongst the best breeds, of politicians we have in nigeria. I met some of them very closely, in the worst of place Kirikiri prison, when the shameless military people, who masquraded themseles as redeemers, but turned out to be the biggest destroyers and looters of the history of our great country. These sick military people called some of us, security risks, hence they detained some of us, without taking any statements from us and without telling us up to this day why we were being detained. Some of us paid the price, because we were bold enough to stand up, against their missrule and lootings. Why is the President not taking advice from some of these great, honest and competent Nigerians? Rather his advisers are the corrupt and indicted ex governors. the likes of James Ibori and co, the same people who bank roled his so called elections in 2007. These indicted and corrupt ex governors were the errand people and agents of the same military persons that ruined Nigeria. The military forced these lots on us in 1999 and even gave them immunity, from arrest and prosecutions for the looting of the nation’s wealth. I do not care who rules Nigeria but the person must be competent, willing able and ready to rule and lead Nigeria. The Vice President is equally as hopeless and not ready as the President as they are only answerable to these disgraced, corrupt and indicted ex governors. Nigeria deserves better and the Almighty God wil,l definitely punish any person or a group of people who place, personal interest, tribe, race, region or religion above the interest of our great country Nigeria. If the President has your ear, please tell him and his familiy and friends to distance themselves from these shameless, corrupt and indicted ex governors immediately and the president should borrrow a leaf from his late father and late brother. These two great men served Nigeria with honour, decency, decorum and pride and we all appreciate and admire them. Tell the President that time is running out, but that he still has the time to redeem his good name.
na wa for northerners, only yesterday one governor from tthe ibo stock was summoned by the sultan in an abusive manner. were are we going now?
A Budget is Not a Mere Decoration of Intent
I have said it many times that the North is not yet ready to rule Nigeria in these normal and democratic times. Here, some of the Northern people will say I am against the region. Were they to understand what I say, they will not say I am against them.
Politically, when you criticise a region, you are talking about the ruler(s) from the area that represent the people and do not know how to govern a nation. The criticism is not directed to the whole people of the North. A whole unit of people is neither the same, incompetent, primitive, zealot, corrupt nor put their region before the nation.
Since Nigeria’s independence 49 years ago, the North and Middle Belt have ruled the country for 38 years, the North 20 years and Middle Belt 18 years. During this period Nigeria never witnessed Government, political, economic etc stability. When the country takes one step forward, they will take the country two steps backwards. Today there can’t be more evidence of this as in the instability and confusion that are everywhere.
The North is always preoccupied with revenge, dismantling of the structure on the ground and starting all over again. Look at Yar’Adua and the country in general, at the NNPC, Waziri at the EFCC and Sanusi at the CBN, the key areas of society. All they know is how to consume money with no head, tail or any achievement. They don’t know how to preserve or grow money.
OBJ met virtually empty treasury in May 1999. With lower oil revenue unlike during the past two and three quarter years of Yar’Adua, OBJ paid off almost all the country’s foreign debt, saved, left hefty treasury and foreign reserve for the country by May 2007. Today Yar’Adua has taken all this money only within two and three quarter years in office. In addition, he and his State and Local Governments are borrowing here and there.
The annual budget of the Government is about what it planned to spend on it activities. The related cash flow is prepared along the budget. A provision is made in the budget for emergency expenditure. If the anticipated revenue is less than the budgeted expenditure, arrangement may be made to borrow the shortfall. But such an arranged loan is not taken until it is actually needed.
With these the Government does not go cap in hand before noon of the budget to ask for more money or appropriation. The budget is followed and supposed to be strictly followed. You do not run around like headless chicken for issues that were not budgeted.
During YarAdua’s tenure, the average price of crude oil has be consistently well above the budgeted levels. With this can any anyone tell the nation why Yar’Adua’s Federal, State and Local Governments should go about borrowing money here and there, and raising bonds every day?
At about this time last year, our foreign reserve stood at $67bn, excess crude oil account stood at $27bn. As at today we are told that we only have about $43bn in our foreign reserve and $7bn in excess crude oil account. This means that Yar’Adua has taken about $74bn ($24bn plus about $50bn earned fund but was consumed and not saved) and $20bn ($27- 7) of excess crude oil account. Today Yar’Adua has blown all this money only within two and three quarter years in office.
What has Yar’Adua and his State and Local Governments spent this amount of money? There is nothing to show as available infrastructure and as to what the public money is spent. There is not anything that has improved or changed for good in the country. The banks, contractors, internal and external creditors are not paid. Many staff’s salaries are months in arrears.
What is the essence of annual budget if it is not to be followed? Why should Yar’Adua and his Federal, State and Local Government continue to borrow money when the average price of crude oil and other revenue are well above the budgeted level other than to borrow and steal in many disguises?
That is a blatant lie patrick. People like you insult unknowingly bring your forefathers to disrepute. Ask Ojukuw, ask Chinua, ask Dora, ask Okonjo…They have been e-shot. Let me tell you, president Umar is trying and whether the southerners like it or not, he will surely serve his remaining tenure
It’s not so surprising, following on the comments from the national assembly that ministries have no skills and competence to do any job.
One must ask a veru serious question, what have these loans been used for? There are no visible signs up and down the lenght and breadth of nigeria, may be with with little exceptions in Lagos in areas under the state govt. The whole infrastructures are decaying and rotting away despite the billions in dollars from oil and trillions in taxes.
Obviously, the govts and those in power are not answerable to anyone but themselves and their pockets. The siren call and alarm by alhaji yelwa, like may many other serious nigerians that have been calling on those in power to look and listen, will unfortunately fall on deaf ears. Like the saying goes ” the hunter’s dog that will get lost, will not heed the hunter’s whistle”, the current PDP govts at all levels and almost all non-PDP politicians have failed woefully.
The questions then are: how do we begin afresh? where do we start from? whom are those that can be trusted with effective governance? who will lead the country out of the comatose state? where are the ghandis? where are the kennedys? where are the mandelas? where are the rawlings? Where are the yet unknown nigerian heroes and heroines?
Mr. President I never knew, I will be saying this as I was one of those, who thought that we Nigerians, should give you a chance, when you were forced on Nigeria, by the evil cabal. Knowing your back ground and your family very good records, I thought you will make the job of being the President a huge success. Mr. President you betrayed that confidence and I will say with a very heavy heart that, you are not equal to the job. You have proved beyond all reasonable doubts, that you were very unprepared to be the President of Nigeria. I admire your family especially your father and elder brother, but I must tell you that, it is time for you to tell Nigerians the truth and step aside. All you are doing is just coating along and hoping for a miracle to happen. Mr. President that is an illusion and it is very unacceptable. Mr. President please make that, informed decision now for the sake of our great country Nigeria and just GO.
Mr, President you in office but not in power. The power is in the hands, of the wicked cabal especially, the corrupt and indicted ex governors and their likes, that hoited and forced you on Nigeria. Who knows if you, are waiting for this same cabal, to give you the second term, before you becomes your own person? I never believed that you will ever, cow toe to these wicked cabal and their biddings. I must confess, that I am one of the many who insisted, that we should give you a benefit of doubt and I must confess, that I have been conned with many others. Allowing the same senario to repeat itself, will be too risky for Nigeria. The only alternative is for you to take the mantle by the horn, in the remaining months of your presidency but If the fail to reverse, all these know anomalies, in the remaining months of your time in office and completely distance himself, from this wicked and dangerous cabal, it will then confirms that you are, an unwilling horse and no matter what one does, you can not force an unwilling horse to drink water. Then the best thing, for you to do, is to tell Nigerians and the world that your hands were, tied firmly behind your back and you should then step aside when your first term expires.