Implementing the Fiscal Responsibility Act at the State Level in Nigeria

A discussion of the policy, technical and wider institutional factors was presented in this paper, which is relevant to the implementation of fiscal responsibility acts at the state level in Nigeria. It is evident from the analysis here, that some progress has been made by 20 of the 36 states in Nigeria in enacting FRAs, to complement and extend the federal FRA, while another 13 state governments have presented FRAs to their state legislatures for ratification. While this development is laudable, there is still much to be done to improve the impact of the FRA on public financial management and the anti-corruption efforts of the government. Furthermore, as the example of the controversy and confusion surrounding the ECA illustrates, there is a lot of mistrust and antagonism between the states and federal governments on fiscal autonomy and constitutional entitlements to pooled Federation revenue. These tensions are occurring against the backdrop of an increasingly loose fiscal policy stance, warranted by the approaching 2011 elections, and the growing claims by states on the ECA and to influence political decision-making through the NGF. The opaque nature of public finances in Nigeria also poses challenges for civil society transparency groups, and Nigerian citizens' engagement with the budget process and fiscal plans of the various levels of government. With regards to the policies to enhance implementation of fiscal rules at the state-level, firstly, it is imperative to provide technical support to the states for macroeconomic and fiscal policy analysis, and to review draft FRAs to identify technical lapses, in order to strengthen their implementation.