Sub-nationals and the Fiscal Responsibility Act:

Transcript:Sub-nationals and the Fiscal Responsibility Act::
Sub-nationals and the Fiscal Responsibility Act: Mainstreaming for Sustainable National Development Eze Onyekpere Esq ARTICULATING SUSTAINABLE DEVELOPMENT The term “sustainable development” has been articulated as an economic development module that mainstreams environmental and planetary health in a way and manner that does not unduly deplete nature’s resources and as such, maintains the dynamic equilibrium for the survival and flourishing of the Earth and its inhabitants. 2 It has been concretised in the 17 Sustainable Development Goals (SDGs) vis; End Poverty Zero Hunger Good Health and Well-Being Quality Education Gender Equality Clean Water and Sanitation 3 Affordable and Clean Energy Decent Work and Economic Growth Industry, Innovation and Infrastructure Reduced Inequalities Sustainable Cities and Communities Responsible Production and Consumption Climate Action Life below Water 4 Life on Land Peace, Justice and Strong Institutions Partnerships for the Goals Essentially, the foregoing are about the proverbial dividends of democracy. The fundamental aphorism is that these SDGs can only be realized when public resources are managed with fiscal responsibility. 5 The Nexus Fiscal Responsibility (FR) and Sustainable Development (SD) meets at the intersection of the policy, plan and budget continuum and reflects in sound and effective public finance management systems. This is the case both at the federal and subnational levels. The imperative of FR at the subnational level is that although we may have 36 states and the FCT, there is only one Nigerian economy. 6 What happens in one state affects the entire Federation and free-riding in terms of refusing to reform while others take the pain of reforms will result in overall fiscal irresponsibility, inefficiencies and retarded economic growth. It will produce exactly the same kind of situation we have in the Nigeria of today where subnationals find it difficult to meet basic state obligations in essential service delivery and payment of salaries and emoluments of their workers. 7 ARTICULATING EFFECTIVE PFM Wikipedia, the Free Online Dictionary defines Public finance as the study of the role of the government in the economy. It is the definitive branch of Economics which assesses the Government revenue and Government expenditure of the Public Authorities and the adjustment of one or the other to achieve desirable effects and avoid undesirable ones. 8 The purview of public finance is considered to be threefold: governmental effects on (1) efficient allocation of resources, (2) distribution of income, and (3) macroeconomic stabilization. Resource generation, resource allocation and expenditure management