The Fiscal Responsibility Commission has said the nation operates a broken budget system since annual budgets are always passed about four months into a new year.
It also stated that only five states of the federation had adopted the Fiscal Responsibility Act, five years after the law was passed by the National Assembly.
It made the position known at an interactive session with members of the Benue State House of Assembly in Abuja on Wednesday.
The Chairman of FRC, Alhaji Aliyu Yelwa, lamented the delay in the passage of budgets.
He said, “Nigeria operates a broken budget, which is signed into law some four months into the target financial year and often extends its budget to the month of March in the subsequent budget year in respect of capital expenditure.
“Despite the extension of the budget year, the performance of the capital expenditure is about 60 per cent. This is partly explained by the government’s inability to comply with hard budget or take hard fiscal decisions. The inordinate delay in concluding the budget exercise, therefore, largely defeats its purpose and effectiveness.”
The FRC boss also pointed out some challenges that faced the implementation of the Fiscal Responsibility Act.
He said, “Although the Act provides for offences, it does not stipulate the matching punishments. It denies the commission the power to prosecute or punish the offenders under the Act. By implication, the FRC can only name and shame the offenders.
“In Brazil, where the FRA provides criminal punishment and in India, where the FRA provides for carrot and stick, there is reasonable degree of compliance. In Brazil, within two years of the implementation, 26 out of 29 states had adopted the law.
“The Brazilian model also provides sanctions for violations and this includes position loss, prohibition from contesting elections into office for five years, fines which can range up to 30 per cent of annual salary and jail terms ranging from three months to four years.”
The Commissioner, Policy and Standards, FRC, Dr. Silvanus Mordi, said it was regrettable that five years after the Fiscal Responsibility Bill was passed into law by the National Assembly, only five states had adopted the law and established fiscal responsibility agencies.
According to him, the purpose of the Fiscal Responsibility Bill will fail if states are not disciplined, since they consume more resources when the total sources and expenses of the three tiers of government are analysed.
Mordi also regretted that officials that contravened the Fiscal Responsibility Act could not be prosecuted since the Act neither stipulated sanctions nor conferred the power of prosecution on the commission.
He called for urgent amendment of the Act in order to address the lapses, which had been identified in five years of operating the law.
The Benue House of Assembly delegation was led by Chairman, House Committee on Appropriation, Mr. Jato Ianna.
