CSOs urge NASS to revise debt management legal frameworks 

Sat, Feb 3, 2024
By editor
4 MIN READ

Politics

THE Civil Society Legislative Advocacy Centre (CISLAC) and Tax Justice and Governance Platform, have urged the National Assembly to revise legal and institutional frameworks related to debt management, emphasising transparency and accountability.

Mr Auwal Rafsanjani, Executive Director of CISLAC, made the call at a joint news conference by CISLAC and Tax Justice and Governance Platform with support from Christian Aid.

Rafsanjani said that bodies like the Fiscal Responsibility Commission and the Debt Management Office also needed  to be empowered  to enforce laws and regulations.

He said the groups also called on the Nigerian government to reduce its dependency on international and especially private creditor borrowings.

According to Rafsanjani, borrowing accounts for about 60 per cent of the annual debt servicing cost and prioritises concessional loans, in adherence to legal stipulations.

He said that the current economic situation in Nigeria, characterised by dwindling government revenues and escalating public debt, demanded immediate and strategic interventions.

According to Rafsanjani, Nigeria is facing a critical economic challenge, marked by a substantial allocation of its revenue towards debt servicing.

He said that as of December 2022,  80 per cent  of Nigeria’s total revenue was dedicated to that purpose.

“The new government on its part has commended itself for allocating more funding to social services in its 2024 budget.

“However, the country will spend six times more on servicing debts than on building new schools and hospitals in 2024.

“In its N28 trillion 2024 budget, the pattern of bloated recurrent spending new borrowings and unsustainable debt servicing costs still persist.’’

Rafsanjani said that debt service was allotted N8.25 trillion as debt servicing was at 45 per cent of total income, while it currently sits at 98 per cent, as the World Bank projects 160 per cent by 2027.

He said that the government’s persistent reliance on borrowing and the loss of substantial revenue through tax expenditures had compounded these challenges.

Ms Nancy Humphrey, Lead Director, Neighbourhood Initiative  for Women Advancement and member of the Tax Justice platform ,said that to mitigate this situation, the group made some recommendations.

Humphrey said strong civil society involvement in public debt management was crucial for robust citizen participation and ensuring the alignment of debt-raising activities with national development goals.

She said the Ministry of Finance, Budget and National Planning, and related agencies should enhance revenue generation by expanding the tax net, improving tax compliance and revising tax incentives.

Ms Juliet Ukanwosu, Executive Director, Extractive 360, said that exploring revenue streams such as carbon taxes, in line with progressive taxation principles would further augment government income.

“Loan approvals should undergo rigorous legislative scrutiny, with public involvement and transparent disclosure of terms and conditions.

“Review all the existing tax expenditures and criteria for such benefit including but not limited to Pioneer status, contribution to economy.

“Remove the power to grant tax expenditures from the Minister of Finance or the Executive and only place a duty on the Executive to document the recommendations, proposals and justification for tax expenditure subject to the approval of the legislature.

“Tax expenditures should not exceed 10 per cent of projected revenue every year or within the medium term.’’

Ms Juliet Ukanwosu, Executive Director, Extractive 360, added that transparency, accountability, and popular participation in tax expenditure management should be enhanced.

This, Ukanwosu said, should be through making the proposal accessible on a public electronic portal, with evidence-based data justifying tax expenditures before approval.

Mr Harry Udeh , Executive Director, Support Training Entrepreneurship Programme ,said that the CSOs believed that the principles of transparency and accountability should be the guiding principle in the administration of tax expenditure.

Udeh added that the tax justice platform called for the need for annual budgets to be accompanied by a tax expenditure statement that detail the above analysis.

“Through strategic policy reforms, enhanced transparency, and responsible fiscal practices, it is possible to navigate these challenges and set the course for sustainable economic growth and stability,’’ he said (NAN)

T.S

-February 3, 2024 @ 6:23 GMT|

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