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AGANGA, BABALOLA AND THE CALL FOR FISCAL PRUDENCE


It is good to have fresh heads attend to a problem. That's one reason the appointment of the current minister of finance, Olusegun Aganga, gives hope to hope. Now his minister of state, Remi Babalola, raised an issue recently, and for the simple reason that Aganga, prior to his appointment, was Managing Director - Goldman Sachs International, London, he should know the intricacies involved in the issue raised and do something about them.

Remi Babalola shared the content of the national treasury to the three tiers of government the other day and spoke in the process. He said government should adopt fiscal prudence at all tiers of governance in line with the provisions of the Fiscal Responsibility Act (FRA) 2007. Fiscal prudence, he added, would assist in maintaining macroeconomic stability and also position the economy on a sustainable growth trajectory - all of that at the monthly Federation Account Allocation Committee (FAAC) meeting, which was attended by state commissioners of finance.

Now this is a rough background to what Babalola said. Recently, Abia State government took a closer look at the performance of its local Councils: it discovered that funds were pumped to them, but Council Chairs found it expedient not to pay public servants their dues. The state government had to step in to pay debts it didn’t owe. That’s an example of what transpires at the local government level across the nation.

Some state governors, both present and former, are also answering questions over money laundering at home and abroad. Others are answering questions from Nigeria’s anti-graft agencies on how they expended billions of naira they had received as ecological funds. It is alleged recently that for all the revenue the nation’s oil monopoly giant garners, it has become bankrupt. NNPC says it is not true. In Nigeria, rumour is the truth, while truth or even a lie is told in half-measures.

A senior member of the National Assembly was said to have found it difficult to explain to EFCC how almost half a billion naira came into his accounts in the face of accusations of financial recklessness being leveled against the leadership of the lawmakers. In the face of that, one senator was harassed by his colleagues for telling EFCC boss that lawmakers needed to clean up their stables before they can credibly ask others to open up their accounts as they carry out their oversights. And there are the amazing amounts that lawmakers allocate to themselves, which observers said are done in violation of seals set by a federal body that decides how much public officials should take home. That law (FRA, 2007) was what Babalola referred to when he made his call for fiscal prudence. It means some governments have been flouting known laws and no one is embarrassed about it.

The point is, the call made by Babalola talks to a bigger problem. Making officials expend public funds with prudence is one thing, making them expend what is expended based on credible data or statistics is another. The Executive branch of the federal government sent a Supplementary budget to the National Assembly days back. In it, the government wanted military budget slashed by 40 percent. Some legislators put up resistance, arguing that such a move would be counter-productive. But the legislators cited no statistics to back their claims aside from the fact that the military is involved in peacekeeping operations; the government too probably did not supply data to convince lawmakers why they should vote for slash. Such things have made ghost soldiers and ghost military pensioners possible.

Now, Aganga, knows all about the nation’s budget. Apart from the president, he is the one who could defend it to lawmakers. He knows it is hardly planned based on reliable data. The nation does not even have an accurate and reliable census figure. Since he arrived office in April, can the minister beat his chest and say, the data on which government ministries base their budgets are reliable and up-to-date? When Babalola called for fiscal prudence, he and Aganga know this is not possible if government officials would sit in ministries, touch fifteen-year-old statistics here and there, and then send budgets to lawmakers based on it. Both at the federal and state levels, it is a loophole for mismanagement of public fund.

It is disheartening how some of government intervention programmes in the area of poverty alleviation and the rest appear like a bucket of water poured into an ocean. Government plans a housing programme for 2020 that would have been adequate for Nigerians thirty years ago; it plans to generate electricity that would have been adequate for the nation’s consumption a decade earlier; it wants to create jobs that would have been enough for only university graduates twenty years ago. The list of the damages that lack of reliable statistics can do is endless.

No statement on this can be stronger than when Babalola, for instance, told FAAC members that President Goodluck Jonathan had directed the Department of Petroleum Resources (DPR) to henceforth generate monthly oil production statistics for reconciliation in the second month after the month of data gathering. The directive, he said, had become necessary to address the problem of recoveries for overpayment and underpayment to state from the 13 per cent derivation computation due to the lateness in the release of derivation indices. He also called for the harmonization of the various economic policies of the tiers of government in order to achieve medium term credibility.

Aganga was praised to the nation as a capable hand in the right post when he arrived office. There is no reason to doubt such praise considering his background. But it will be unbelievable that by the time he leaves office, the entirety of the government ministries and department would not have seen fundamental changes especially in the area of planning based on rigorous statistics in a way that will have positive impact on the planning of the nation’s budget. The president has taken a step in this direction. The boss in finance ministry should exert the influence of his office, and ensure this is spread across ministries. It may yet prove his lasting legacy – one of the major things to do if the call by his minister of state will not be one small wind in a storm.

Ajibade, a Consultant Writer, lives in Abuja.

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