RMAFC warns against rising debt profile

Chinyere Anyanwu

The Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) has warned against continued deficit budgeting, which results in the country’s rising debt profile.

This was part of the commission’s observations contained in the communique it issued at the end of its three-day retreat in Lagos recently.

The commission, during the retreat, observed that “deficit budgeting which creates avenue for borrowing has continued to raise the country’s debt profile internally and externally.”

In the communique signed by the commission’s Chairman, Elias Mbam, and Acting Secretary, A. B. Mohammed, RMAFC revealed issues affecting the development of the country and challenges hampering the effective performance of its constitutional mandates.

Among issues observed at the retreat were the non-involvement of the commission in the budget process of government despite its fiscal efficiency function”, and that “inadequate funding, insufficient geoscience data, artisanal/illegal mining activities, community agitations as well as low technology utilisation seriously affect the operation and performance of the solid mineral sector.”

In its recommendations, the RMAFC said, “the commission’s enabling law should be amended to guarantee its financial independence and power of enforcement to enable it discharge its functions effectively, and that the commission should evolve a workable mechanism to block revenue leakages, diversion of funds, and recover unremited revenues.”

The commission also resolved that it would encourage government at all levels to save for the rainy days as well as develop the political will to diversify the economy.

In addition, it recommended that, “utilisation of external and internal debts in financing budget deficits should be closely monitored for use in the execution of infrastructure and not for recurrent expenditures”; that “the commission should be involved in the preparation of the budget particularly in setting targets for revenue generating agencies,” and that “the oil and gas industry should carry out institutional reforms including accurate metering systems at all terminals,” among others.

The commission called on the federal, states, local governments, revenue generating agencies and other stakeholders to partner with it in the discharge of its constitutional functions by considering and implementing the recommendations in the communique.