The Chairman of the Fiscal Responsibility Commission (FRC), Victor Muruako, has accused some revenue-generating agencies of the federal government of failing to remit over N1.2 trillion to the Consolidated Revenue Funds.
Muruako blamed the abuse of the fiscal regime by the MDAs on the defects in the Fiscal Responsibility Act, 2007.
He noted that some government-owned enterprises are failing to remit 80 per cent of the operating surplus as stipulated by the Fiscal Responsibility Act.
Muruako made this known while briefing journalists on Wednesday in Abuja.
He stated that over N2.15 trillion had been remitted by some agencies since the law came into effect.
READ: Senate suspends plenary for constitution review
“From our records, the total figure paid as Operating Surplus since the establishment of the FRC to date is beyond N2.15 trillion which, by the way, could not have been possible without the Act and the Commission, given that there would have been no law, rule, regulation or institution requiring such returns.
“Sadly, many MDAs persist in defaulting and practically keeping money away from the federal government’s reach for funding its budgets. Our records indicate that over N1.2 trillion is still in the hands of defaulting MDAs,” Muruako said.
He explained further that 60 per cent of MDAs are failing to comply with the Medium-Term Expenditure Framework, thereby taking more projects they have the capacity for.
According to him, this inability to comply with MTEF is responsible for abandoned projects.
“Over 60 per cent of government agencies do not associate their annual budgets with a Medium-Term Expenditure Framework. This is responsible for some agencies simultaneously undertaking more projects than they can handle per time.
“The penchant of approving new contracts by new Governments to the detriment of existing contracts as well as inadequate funding lead to a litter of abandoned projects,” he said.
Another defect with the existing FRA, according to the chairman, is the lack of standard debt limit criteria for states and local governments.
He said the debt-GDP ratio currently being used is not efficient to determine the debt limit for states, adding that some states do not have accurate data on GDP.
“We understand that the fact that states are yet to have data on their GDPs is part of the challenge in setting the debt limits. While the Debt Management Office (DMO) relies on the globally acknowledged index of debt-to-GDP-ratio for measuring the sustainability of the nation’s debt profile, the sustainability of debts of respective states is left unmeasured,” Muruako said.
The chairman said there was a need for the FRA to be amended to address the defects in the principal law.
The bill to amend the FRA Act was introduced on Wednesday, during the plenary.
