The House of Representatives has passed through second reading consolidated bills seeking to repeal the Fiscal Responsibility Act of 2007 and re-enact a new Fiscal Responsibility Act, 2024, to provide for prudent management of the nation’s resources; ensure long term macro-economic stability of the economy and secure greater accountability and transparency in fiscal operations within the medium term fiscal policy framework.
The consolidated Bill, which passed through second reading at the plenary on Tuesday, sponsored by the Deputy Speaker Rt. Hon. Benjamin Kalu and six others, specifically seeks to enhance economic stability and strengthen the management of financial resources.
Leading the debate on the general principles of the Bill on behalf of the Deputy Speaker, other sponsors and co-sponsors, Hon. Marcus Onobun said the bill aims to address loopholes in the existing framework and equip the Fiscal Responsibility Commission (FRC) with the tools necessary for effective enforcement and revenue generation.
He stated that in the face of the present dire situation of the country’s revenue profile, it has become imperative, to reposition and strengthen the structure, functionality and effectiveness of the Fiscal Responsibility Commission through the repeal and re-enactment of the Fiscal Responsibility Act, 2007 – which will ultimately increase the Commission’s capacity to, among other things, generate independent revenue into the Consolidated Revenue Fund (CFR) of the Federal Government.
The lawmaker also stated that, in sections 22(1) & (2) of the Act, government corporations listed by the Commission are mandated to remit 80% of their operating surplus to the consolidated revenue fund and keep 20% in their general reserve fund.
He, however, lamented that many governments owned corporations fail to remit their operating surplus to the consolidated revenue fund at the end of a financial year as stipulated by section 22 of the Fiscal Responsibility Act, 2007.
He said, “I am honoured to lead the debate on the general principles of these important consolidated Bills which seek to amend the Fiscal Responsibility Act, No. 31 of 2007 on one hand and also to repeal the Fiscal Responsibility Act, No. 31 of 2007 and to enact the Fiscal Responsibility Act, 2024 to provide for prudent management of the nation’s resources; ensure long term macro-economic stability of the nation’s economy; secure greater accountability and transparency in fiscal operations within the medium term fiscal policy framework; and the establishment of the Fiscal Responsibility Commission to ensure the promotion and enforcement of the nation’s economic objectives. These Bills were read the first time, in this hallowed chamber on different days.
“The Fiscal Responsibility Act, 2007, which has been in operation for over one and half decade now, has been observed and found to contain certain loopholes and weaknesses which have hampered its effective and efficient operation and the smooth achievement of its intendment. It is important to note that the extant Fiscal Responsibility Act of 2007 comprise 57 sections, structured into 14 Parts with one Schedule. The Act lists Corporations and Government-Owned Enterprises (GOEs) directly covered by the Act. Between the time of enactment and now, many other agencies have been added to or removed from the list by pursuant to reviews undertaken by Ministers of Finance therefore bringing the total to 68 Corporations and GOEs. These additions have necessitated the review of over 47 sections of the extant Act.
”Again, the contemplated review of the extant Act, proposes a review of the powers of the Commission under section 2. This Bill seeks to expand the powers of the Commission, to among other proposed powers include conferring the Commission with direct prosecutorial powers. This will greatly enhance the powers of the Commission to effectively enforce the provisions of the Act, especially in collaboration with anti-corruption agencies. It is important to note that without the contemplated prosecutorial powers, the Commission remains a mere toothless bull dog. Mr. Speaker, Honourable Colleagues, considering the severe setbacks being suffered by the Commission in carrying out its mandate due to paucity or dearth of funds and shortfalls in monthly allocations, section 4 of this Bill proposes provisions to improve the Commission’s funding for greater service delivery. Sections 50-52 of the Bill proposes elaborate provisions on offences and penalties for the infringements and contraventions of the provisions of the Bill when passed into law. The proposed punishments have been categorized into administrative and penal sanctions.”
The Bill was put to a voice vote by the Speaker, Rt Hon Tajudeen Abbas who presided over the plenary session and it was supported by majority of the lawmakers and was referred to the Committee on Finance for further legislative action.
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