Broken Rule in Nigeria’s governance playbook
John Onyeukwu
Broken Rule in Nigeria’s governance playbook
Why the Fiscal Responsibility Act fails and what must change
John Onyeukwu
(Published in my Policy & Reform Column of Business am Newspaper on Monday August 18, 2025). Page 6 in the attached.
When Nigeria enacted the Fiscal Responsibility Act (FRA) in 2007, it was
supposed to draw a firm line between fiscal prudence and recklessness. The law
promised transparency, debt sustainability, and an end to borrowing for the
wrong reasons. It was anchored in the 1999 Constitution’s declaration
that “the security and welfare of the people shall be the primary purpose of
government” (Section 14(2)(b)), recognizing that fiscal policy is not
abstract economics but a constitutional duty. Eighteen years on, the FRA is
more honored in breach than in observance. Its key provisions are routinely
ignored, and the institutions meant to enforce it have been rendered toothless.
The FRA is clear. Section 41(1) limits borrowing at all levels of government to capital projects and human development, and only on concessional or reasonable terms. Section 30(1) requires the Finance Minister to publish quarterly budget implementation reports within 30 days of each quarter’s end. These are binding obligations, yet successive governments have borrowed to fund salaries and other recurrent costs, in breach of Section 41. Budget reports, when released, are often late and insufficiently detailed for genuine public accountability.
The Fiscal Responsibility Commission (FRC), established under Part II of the FRA, is supposed to monitor and enforce compliance. Yet, the FRA denies it prosecutorial powers. It can “advise” and “recommend” but cannot compel or sanction. The result is that fiscal violations have become cost-free political choices. This is where the FRA fails the constitutional test of effectiveness. The CFRN’s Section 15(5) says: “The State shall abolish all corrupt practices and abuse of power.” Allowing blatant statutory breaches without consequences undermines that constitutional command.
From a political economy perspective, Nigeria’s fiscal rules operate in a marketplace of political bargaining. Debt is not merely a financing tool it is a political resource. Governors and ministers use borrowing to fund patronage and secure political loyalty, while legislatures, often controlled by the executive, and rarely exercise fiscal oversight.
At the subnational level, the problem deepens. Many states have not domesticated the FRA, and those that have often treat it as optional. State assemblies seldom challenge fiscal indiscipline, even when debt levels breach prudent thresholds.
Several countries in the Global South demonstrate that fiscal responsibility laws can work when backed by real enforcement. In Brazil, violations under the Lei de Responsabilidade Fiscal attract personal criminal and administrative sanctions, with all budget execution data published online in real time. South Africa’s Public Finance Management Act (PFMA) makes reporting deadlines legally binding, with penalties for non-compliance, while Kenya’s 2012 Public Finance Management Act empowers the Controller of Budget to block unlawful spending. The common thread is not the language of the law alone, but its enforcement through sanctions, transparency, and independent oversight. Nigeria has also pledged to meet global fiscal standards, from the IMF Fiscal Transparency Code and OECD Best Practices for Budget Transparency, to the Extractive Industries Transparency Initiative (EITI) and the African Peer Review Mechanism, yet these commitments are consistently undermined when domestic laws like the FRA are ignored.
Recent borrowing approvals by the National Assembly have further exposed the gap between the Fiscal Responsibility Act’s intent and its application. In July 2025, the Senate approved over $21 billion in external loans for 2025–2026, alongside large domestic borrowings, following a $2.2 billion Eurobond approval in late 2024. These approvals raise red flags under Section 41 of the FRA, which restricts borrowing to capital expenditure and human development, and under Nigeria’s Medium-Term Expenditure Framework obligations to maintain a debt-to-GDP ratio within prudent limits. With Nigeria’s debt-to-GDP ratio already edging toward the government’s own 40 percent ceiling, and debt service consuming a disproportionate share of revenue, such borrowings risk breaching both the legal thresholds and the fiscal sustainability objectives the FRA was designed to protect. More troubling is that these massive loans were passed with minimal public debate, undermining the transparency and accountability standards Nigeria has pledged under international fiscal frameworks.
The opacity surrounding these borrowings is further illustrated by the experience of the Centre for Social Justice, a nonprofit think tank, which formally wrote to the National Assembly requesting a copy of the letters and attached schedule sent by President Bola Ahmed Tinubu seeking approval for additional loans and bonds. In its June 12, 2025 reply, the National Assembly stated: “your request cannot be granted, given that the National Assembly is not the author of the subject matter, copy of which you seek. You may approach the author for the same.” This response not only sidesteps the spirit of transparency envisaged by Section 30 of the FRA but also undermines public access to information on matters of significant fiscal consequence. By deflecting responsibility to the executive, the legislature abdicates its accountability role in scrutinizing and publicly justifying borrowing decisions. In effect, both arms of government shield the details of Nigeria’s debt commitments from citizen oversight, weakening the rule of law and eroding trust in fiscal governance.
Breaching fiscal rules is not just a technocratic failing, it is a governance failure. Borrowing for recurrent expenditure is intergenerational injustice: saddling future Nigerians with debt that delivers no lasting assets. It worsens debt sustainability, erodes investor confidence, and deepens macroeconomic fragility. Repeated breaches without sanctions corrode the rule of law. If governments can flout clear statutory limits with impunity, they reinforce the perception that laws in Nigeria are optional for the powerful.
If the FRA is to matter, reforms must go beyond cosmetic amendments. The Act should be amended to give the Fiscal Responsibility Commission prosecutorial authority, along with clear and enforceable sanctions for violations. Compliance must be tied to federal allocations, so that states breaching FRA provisions face conditional transfers. Transparency should be institutionalized through real-time publication of budget execution and debt data, as practiced in Brazil. Legislative oversight needs strengthening by equipping and incentivizing parliaments to challenge fiscal indiscipline. Finally, the FRA must be domesticated in all states with harmonized sanctions and robust enforcement mechanisms, ensuring nationwide fiscal discipline and restoring public trust.
Fiscal responsibility is not merely an economic choice; it is both a constitutional duty and a moral imperative. Section 16(1) (a) of the CFRN obliges the State to utilize the nation’s resources to foster prosperity and build an efficient, dynamic, and self-reliant economy. Without real enforcement, the FRA will remain just another broken rule in Nigeria’s governance playbook. And as every constitutional lawyer knows, when rules break without consequence, it is not just the law that is in danger, but the republic itself.
http://www.policy.hu/onyeukwu/
“Let us move forward to fight poverty, to establish equity, and assure peace for the next generation.”
-- James D. Wolfensohn
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Cornelius Hamelberg
Broken English, Buckingham Palace English
“Broken words never meant to be spoken”
Bob Dylan : Everything Is Broken
Miserly (like Silas Marner)
shuffering & shmiling in misery
with most people mired in poverty
the big problem is always about money
money management and money mismanagement
is the big problem
not poetry :
When the government prudently enacted the Fiscal Responsibility Act
it was supposed to draw a firm line between fiscal prudence and banditry
How should some honest Joe who wants to invest in Nigeria react to this kind of report card that concludes “And as every constitutional lawyer knows, when rules break without consequence, it is not just the law that is in danger, but the republic itself.”
Unless such an investor is in cahoots with the criminals, it’s not only “the republic itself” but his own hopeful investment that would be in danger.
Once upon a time I was on the brink of persuading some ogas over here about setting up some canning industry in Rivers State…but that didn’t take off either, not after some Swedish entrepreneur made the following first person report on the radio : ”Nigeria, where between the airport and my hotel I was robbed twice, first by the military and then by the police!”
What you can do for your country, my foot.
In Nigeria, when the bribe-taker tells you to
“Do something reasonable now”, he means give me
a reasonable bribe, one that would be acceptable,
not too little - because, that would be an insult,
below my dignity, I like the way you work it - Blackstreet
No diggity, that is how he solicits, with a good conscience
and expects you to co-operate, since you are already
compromised by having already surrendered / submitted
not to Allah subhanahu wa ta'ala, but to the corruption
system. So, two weeks before I was due to leave Nigeria
the Bank Manager of Savannah Bank at 10 Aba Road,
Port Harcourt, sent his slave, his messenger boi to me
in Bakana , to tell me that he wanted to see me and when
I arrived at his office, he put it to me straight : “ If you give
Me half” ( of my £6,000 Sterling) ,” you can leave with your
money, immediately!” And me, I was thinking like Svensson
I thought this idiot bank manager must be crazy - half of my
money? So I asked him, “ And if I don’t give you half?” He
answered, ”Then you will have to wait.” How long? I asked him.
O a few months, he answered. The fact is, I’m still waiting. An
Oyibo boarded the departure plane and plumped himself down
Right next to me, his face moist with beads of perspiration which
he wiped off with a chequered handkerchief and wheezing in the heat
right out of the blue he asked me, ”Did you get your money ?”
Which money? He explained and then I told him what the bank manager
had told me. “You’ll never get it!” he said, seriously, and I thought RACIST !
One after the other, commissions of inquiry come and go, having accomplished nothing.
Why then does a political scientist like Ike Udogu sound so surprised, so full of great expectations
The Oga in that video has presented his rationale so clearly :
”You cannot pay a minister
less than a million naira
per month, since 2008 and
did not increase his salary
and expect that he will put
in his best, without necessarily
being involved in some other things…”
Do the Ogas even bother to read these kinds of reports? Pleas ? Correctives?
They all probably fall on deaf ears.
Can the miscreants be made accountable?
Does anyone know what time it is?
Do they even care?
Nice : https://www.youtube.com/watch?v=y6x2yaay2hU