Fiscal Transparency, Accountability: NGF Elucidates Role, in CSOs’ Workshop

Several sessions addressed the workshop’s core theme, like - “Public Procurement Reforms: Challenges and Prospects by NGF National Chart of Accounts (NCOA) as a Tool for Effective Budgeting: Where CSOs Come In,”; “State Audit Laws as Tools for Increased Transparency in Governance,” and “Why Debt Sustainability is Important.”

To further highlight the CSO Workshop Agenda and the NGF’s role in maintaining fiscal transparency and accountability, the NGF interviewed Mr. Ibrahim Mohammed, the Media Consultant at the SFTAS Program Coordinating unit at the Ministry.

Excerpts:

What is the overall goal of the event, the CSO Workshop Agenda?

The objectives of the CSO Workshops which were held in Abuja and Lagos include:
i. to deepen the understanding of CSOs on the major programme elements of the SFTAS Programme for results;
ii. to enhance programme visibility and buy-in;
iii. to enhance community mobilization for programme ideals’ sustainability; and
iv. to engender ownership and participation by CSOs post-SFTAS.

What is the role of the CSOs in maintaining fiscal transparency and accountability?

Given the resounding success recorded by the SFTAS Programme in improving public financial management at the sub-national level, CSOs have a societal responsibility to continue to monitor the implementation of relevant laws and practices that will ensure the sustainability of its ideals.

They could do so through direct engagement with the States when they are empowered with the necessary tools and templates and the needed capacity to interrogate work processes related to programme implementation. They could also use their rich and wider networks in the media to mount effective advocacy and mass mobilization campaigns in their oversight functions.

In doing this, they should monitor for timeliness of online publication, and for quality of content, in particular
• Audited Financial Statements (Annual – end of Q2 to early Q3)
• Publication of Proposed Budget (Annual – Q4)
• Annual Budget (and MTEF/MTSS) (Annual – Q4)
• Conduct genuine Budget consultations and publication of outcomes/minutes (Annual – Q3 to Q4)
• Quarterly Budget implementation reports
• Arrears Clearance Framework, (To be updated annually as necessary)
• State Arrears Recording Verification and Clearance Report SARVCR, (Annual – Q4)
• Aggregate Domestic Arrears, (updated monthly)
• Citizens Accountability Report, (Annual – end of Q2 to early Q3)
• Citizens Budget, (Annual – Q4 – Q1)
• Annual Activity Report of the Office of the Auditor-General etc. (Annual – end of Q2 to early Q3)

The first session of the workshop elaborated on state audit laws as tools for increased transparency in governance. How can CSOs enhance the effectiveness of audit laws and what are the key provisions of the state audit laws?

In ensuring stronger audits, CSOs are expected to maintain eternal vigilance over the implementation of audit laws through sustained close monitoring to ensure that States do not derail and those found wanting to receive adequate public censure by 'naming and shaming'.

The key provisions of the State Audit Laws require that States ensure accuracy, timeliness, and completeness in the following:
i. Publication of Annual Budget information (including proposed and final budgets, evidence of public consultation, and the Citizen's Budget)
ii. A focus on budget realism and departure from unrealistic budgets
iii. Preparation and publication of Quarterly Budget Execution reports
iv. A better understanding of Cash Management and the use of a Treasury Single Account
v. A focus on performance with the growth of Internally Generated Revenues
vi. Stronger controls around payroll to address irregular payments and ghost workers/ghost, pensioners
vii. Publication of Procurement transactions and contract award information
viii. A focus on managing debt and ensuring debt sustainability
ix. Preparation and publication of Domestic Debt and Arrears reports

The second session highlighted why debt sustainability is important. What are the challenges and prospects around sustainable debt management?

Debt sustainability analysis is important for the following reasons:

i. Sustainable public debt is important as it facilitates economic growth through investments in infrastructure projects, social sectors, and other areas of growth.
ii. Sustainable public debt limits the risk of debt distress
iii. Sustainable public debt facilitates healthy fiscal management.
iv. High debt levels lead to heavy debt service which reduces resources available for investment in infrastructure and key sectors of the economy.
v. Debt Sustainability Analysis (DSA) provides the basis for recommendations for a borrowing (and lending) strategy that limits the risk of debt distress.
vi. DSA helps analyze the current and future debt portfolio of the country with a view to assessing its sustainability, detecting potential risks and proffering mitigating measures.
vii. DSA provides guidance to the Government in its borrowing decisions, in order to ensure that financing needs and future repayment ability are taken into account.
viii. DSA enables advise the government on borrowing limits and financing options; and,
ix. DSA Provides inputs into the Budgets and information necessary for updating the Medium-Term Expenditure Framework (MTEF) of the government.
Challenges
i. Low Revenue Base
ii. Growing Debt Stock
iii. High Debt Service relative to revenue thereby reducing fiscal space
Prospects
i. Debt sustainability analysis is one of the veritable tools for effective public debt management at the sub-national level in Nigeria.
ii. The conduct of regular/annual debt sustainability analysis and its use in the formulation of borrowing and fiscal policies would help facilitate debt sustainability at the sub-national level.
iii. Robust debt management strategy, public debt management laws, and fiscal responsibility laws in the States and the FCT would guide public borrowing appropriately.
iv. Adherence to debt ceilings as prescribed by the laws
v. Balancing cost and risks of borrowings by the Sub-nationals in their borrowing activities to meet their financial needs.

How can individual CSOs ensure sustainability?

Many CSOs have shown keen interest in ensuring the sustainability of SFTAS ideals as some like Dataphyte, iengage, and Budgit have already keyed in into the programme by carrying out independent assessments of some DLIs under the SFTAS programme.

There is a strong indication that as the programme winds down, CSOs especially those with a strong bias in fiscal reforms would definitely continue from where SFTAS stops and take ownership of the programme.

Furthermore, the public launch and signing of the States’ Charter to Sustain Fiscal Transparency, Accountability, and Sustainability Reforms by the State Governors would further encourage and embolden CSOs to monitor State's progress in their resolve to strengthen the fiscal system and deliver improved fiscal transparency, accountability, and sustainability.

In particular, CSOs would be keen to monitor the continued online publication of fiscal documents in line with appropriate standards and pursue the implementation of various laws that have been put in place.

How is NGF expected to ensure that CSOs can support in maintaining fiscal transparency and accountability?

Civil Society Organizations as agents of change and public enlightenment are known to play oversight functions on governmental institutions and the society at large. Thus, they hold governments, political leaders, and public officeholders accountable to the public.

As watchdogs of society, they are critical countervailing voices against fiscal indiscipline at the State level and can play a catalytic role in promoting good fiscal governance, accountability, and transparency.

They are usually the ones who know about most of what is going on with members of the communities, as well as their development needs and challenges.

Given the important role they play in development, there is a need for NGF to continue to engage with them, build their capacity and develop synergy in ensuring the sustainability of fiscal reforms embedded in the SFTAS programme. To this end, it becomes imperative for NGF to develop relevant templates and tools that will enable CSOs to track the progress of implementation in the States.

CSOs should be able to monitor all audit outputs including Performance Audit Reports
• Increased and innovative efforts to get citizens and stakeholders interested in PFM and Audit Reports
• Create demand-side pressure for States to sustain the reforms and results and to push for continued fiscal transparency
• CSOs (maybe in a partnership with NGF) establish an online platform to monitor the performance of States.