The Federal Government appears to be moving towards ending the practice of running multiple budgetary fiscal operations simultaneously, a situation that has been generating considerable public discussion. Currently, the government operates under more than one Appropriation Act at the same time—often up to three—which has led to confusion and criticism from various quarters. This approach has been defended by some government officials as necessary but is now set to change.
The Director-General of the Budget Office of the Federation has described the simultaneous implementation of multiple Appropriation Acts not as a fiscal anomaly but rather as a transitional budget system. He emphasized that this method provides institutional flexibility and is supported by existing fiscal laws to ensure the smooth completion of capital projects. Despite this explanation, the practice has drawn significant scrutiny and debate from the public and policymakers alike.
In a recent address during a major economic summit, the Coordinating Minister of the Economy and Minister of Finance announced a decisive shift away from this approach. He confirmed that the government intends to put an end to budget extensions that carry over into subsequent years, a practice that has been a source of considerable confusion within the fiscal system. Discussions have taken place with the National Assembly, and there is now an agreement to restore normalcy by eliminating budget rollovers and ensuring budgets are implemented within their designated fiscal years.
This reform signals a commitment to better budgetary discipline and enhanced fiscal transparency, aiming to improve the overall management of public funds. By curbing the practice of running overlapping Appropriation Acts, the government hopes to create a clearer, more accountable financial environment that will facilitate better planning and implementation of development projects.
Beyond budgetary reforms, the Minister of Finance also shared insights into the federal government’s borrowing strategy moving forward. There is an intention to diversify borrowing sources by increasing reliance on instruments such as Sukuk, Green Bonds, and Diaspora Bonds instead of the traditional Eurobonds. This shift is expected to align the country’s borrowing practices with more sustainable and potentially lower-cost financing options, while also appealing to ethical and diaspora investors.
On the matter of financial transparency, the minister revealed that the federal government has made significant strides. For the first time, it gained clear visibility of its accounts held with the Central Bank of Nigeria as recently as August of the current year. This milestone marks an important step in financial management, enabling the government to monitor its resources more effectively.
Additionally, a federal billing system has been implemented, which allows the government to track payments for goods and services accurately. This system is designed to ensure that all financial transactions are accounted for and that government funds are traceable, thereby reducing leakages and improving accountability.
The minister emphasized the determination of the government to bring all federal funds into full visibility. He acknowledged that a substantial amount of government money remains outside the Central Bank and pledged ongoing efforts to consolidate and make all public finances transparent and accessible for oversight.
These developments point to a broader agenda of fiscal reform and economic management aimed at strengthening governance, enhancing public trust, and laying a foundation for sustainable growth. By addressing longstanding challenges such as budget extensions, borrowing practices, and financial transparency, the government is positioning itself to foster a more prosperous and inclusive economy in the years ahead.
Post comments (0)