Why abandoned projects litter states – Victor Muruako, FRC boss

The Acting Chairman, Fiscal Responsibility Commission (FRC), Victor Muruako, is juggling many balls at the same time. Aside mapping out operational strategies that will ensure the agency stays afloat amid lean resources, he is also pursuing the review of the 2017 Fiscal Responsibility Act that birthed the commission, which he says was needed to boost its operations across the country.

He said the Act, when reviewed, will afford the commission more operational funds, power to extract information on capital projects from Ministries Departments and Agencies (MDAs), who are often reluctant to avail the agency of such.

In a recent exclusive interview with Daily Sun, Muruako said the FRC’s mandate was to ensure prudent utilisation of government’s resources, pointing out nationwide verification of MDAs’ projects has led to returning of billions of naira to the government that would have hitherto evaporated into abandoned or ghost projects.

In this interview, he speaks on other sundry issues.

Excerpts:

Verification

We have begun nationwide verification of capital projects belonging to various MDAs to ensure government’s funds are spent as budgeted. The commission frowns at the high number of abandoned projects because that is unhealthy for the nation’s economy. We also advise the government on how to go about it. Some of the projects were abandoned because of delayed releases of funds. For instance, if a project is to start and end in four years, it may be captured in the first year and it takes off. For some reasons, it may not be captured for the next year and so it remains the way it is. So our work is now monitoring such projects and ensuring funds for them are not diverted or spent lavishly. Our mandate is to ensure prudent spending.

So our staff usually visit selected Federal Government capital projects spread across the six geo-political zones for verification and monitoring as enshrined in the FRC Act. That is in conformity with the commission’s mandate, which include ensuring prudent management of the nation’s resources, engineering long-term macro-economic stability, securing greater accountability and transparency in fiscal operations within the Medium Term Fiscal Policy Framework (MTEF). The Buhari administration is determined to ensure capital projects captured in the budgets are adequately funded to ensure they are completed for Nigerians’ use.

FRC Act

It is something we are pursuing. It is very important to our operations in many areas. We need information about MDAs’ projects, location and a guide to get there for monitoring. But since the MDAs know that our Act, as it is today, does not contain any sanction or punishment for refusing to oblige needed information, they ignore our requests. That is why we seek amendment of the Act. It will help us. It will give us more powers. It will allow more access to funds for better operation.

The amendment process did not start today, it started with the 7th National Assembly but was not wrapped up before they wound down. But I am glad President Buhari has resent it and it is being worked on. But more importantly, I want the MDAs to realise we are partners in progress. We are working for the same government; for Nigerians’ good. There should be value for what government spends so much on. So, if we don’t perform, there will be a snag.

Challenges

We came at a very critical time when this commission was almost scrapped as a result of the Steve Oronsaye Panel. I can tell you that the morale of the staff was very low. But by the grace of God and the commitment of the present management, we have been able to get around it. The present government has assured the commission that it was not going to be scrapped. We have been able to discharge our mandate notwithstanding the challenges. We have been able to make a lot of recoveries from relevant agencies. Yes, we can do much more if we are strengthened and encouraged. But in the face of daunting challenges, especially the implementation of the Act, there are lots of challenges. But that notwithstanding, we are doing all we can to discharge our mandate. It could be better but the Act needs to be strengthened. I am using this medium to appeal to the National Assembly to take the bold step in amending the Fiscal Responsibility Act so that the commission will be in a good position to discharge its mandate without unnecessary problems.

If the Act is amended to provide for sanction, encourage the commission by giving a certain level of finance through some of the remittances by a way of the remitters’ fee, no matter the percentage, it will strength the commission. You can see the budgetary challenges of the Federal Government. Of course, we cannot complain. For us, the process in getting money is from the general appropriation. But we can be encouraged and strengthened by a percentage of your cost to be remitted. I also believe that if the Act is amended, there would be innovation.

Politics

There is need to remove unhealthy politics in the commission. This commission is supposed to be a technical commission devoid of politics. There is so much to be gained if the Act is done in the right way; a situation where the MDAs are aware that there is no sanction when you request for information. To me, if the Act is amended, there will be a new dawn. If that is done, it will kill the issue of funding if the commission is enabled to take a percentage. Be it two, three or four per cent of what the cost of remittance is.

Again, let me say that the process of reviewing the FRC Act has been on since the 7th Assembly. It got to the committee stage before the life of that parliament expired.  We have also taken up the case again and I am happy that the President has requested an amendment from the National Assembly. In fact, we have been so excited and we look forward to it. And I want to inform you also that last week, the Bill came up for second reading and we are very happy that the lower chamber is consolidating the amendment and we are looking forward to a speedy passage.

MDAs 

We all must know that we are working for the same cause. Our interest is to consolidate funds of the Federal Government, making sure that the commission is adequately funded to carry out the project, which they promised, by attracting money, by paying operating surplus which they ought to pay. What does it cost an officer of the agency to ensure that the right thing is done? It is just that will. The will is not there. Then again, to ensure that every kobo spent is properly utilised. It is a task we must accomplish. Like, if we are going out for verification of these MDAs’ projects, we need certain information and these agencies are not willing, which is stalling the process of saying things the way they are. The only thing left for me is to guess. And when you guess, you can guess wrongly. So it is better for the right to be done.

Outlook

Of course, in the near future, we will grow. You know that fiscal responsibility has been growing from stage to stage. When the Act was signed into law in 2007, the commission was set up. Before then, it was from ground zero in terms of remittances. By then, 31 agencies were under the schedule of the Act. The commission has been able to attract and ensure that these 31 agencies remitted funds to the Consolidated Revenue Fund (CRF). As at the last quarter of 2016, by virtue of the Response of Fiscal Responsibility Act, over N600 million has been remitted to the CRF by the various agencies. There has been a lot of improvement. From 31, the Minister of Finance, in the execution of powers conferred on her under the Fiscal Responsibility Act and the approval of the President, has approved addition of more 92 agencies, and we now have 122 agencies under this Act. That was done exactly November 26, 2016. Effectively, we have more agencies in our net and more will still come in. The only thing needed to be done is to strengthen the commission through funding and amendment of the act.

Abandoned projects 

You don’t expect any agency to give you information in a non-existent project. But to buoy what we are doing, we are now moving to the budget. We try to know what each agency got and what for. So, we are improving the system that is now going to the budget straight. We now know what the releases to the agencies are so that on our own we can go beyond the ding-dong of releasing projects from the MDAs. We want to interact directly with the budget and the releases. So that, if possible, we can discover the non-existent projects, if any.

Still on the abandoned project thing, during the last administration a lot was done. There was a committee set up to go round the country to take inventory of the projects. At the time, the projects were over 10,000. Remember that it was stated that if those projects were going to be completed, we would need two or three times size of our budget to do that. With the advent of this administration and the ERGP, what the Ministry of Budget and National Planning has done now is that they have the record of all ongoing projects and what the government is trying to do is to concentrate on completing the ongoing projects and then now brought in the issue of zero-based budgeting so that each of those projects scattered all over the country will be completed by the MDAs. Over time, if you look at the budget, there are very few projects from 2016 budget. They now concentrate on executing the old ones. With time, it is hoped that we will be able to bring some of these projects back to life, which if every administration in the past had built on the previous government’s plan, probably we would not have been where we are. So, we will work towards completing existing projects but reprioritised according to the government.

On the question whether MDAs contribute to our monitoring and inspection trips, the answer is no. We have allocation to do what we are doing. The only cost to them is that they have to provide a guide for us to take us to those project sites to which they (MDAs) also have budgetary allocation. So they don’t contribute to whatever we do. The model we use to show project that is not existent may not be helpful to them.

We are now looking at the budgetary provision itself. What is the amount allocated for each project right in the budget, then we request information from the Attorney General’s office to know what fund is made available in terms of disbursement to these agencies so that we may pick the project that is in the budget and funds that have been made available; then we go to the field for verification.

By that, any project that is not executed, we would have a better chance of finding out. But for now, we concentrate more on making sure that for whatever money we spend, there is value for it and whatever we can do to make sure that any project that has very little amount to complete, the government should pay proper attention to it. But with the current Economic Recovery Programme by the government, I think all these projects have been prioritised. The government is taking time to execute them  according to the level of priority.

Do journalists accompany you when you inspect the projects?

Yes. We make use of journalists in various zones so that they can witness what we do. So once we get to the local zones, we make use of local journalists because they are part of the terrain. One of our constrains is funding. We wish we could go with all journalists but we can’t even fund our personnel. But we try to make the public see what we are doing by involving civil society.

About the commission 

The FRC has mandate under the enabling Act to compel any person or government institution to disclose information relating to public revenues and expenditure  and cause an investigation into whether any person has violated any provisions of this Act.

If the commission is satisfied that such a person has committed any punishable offence under this Act or violated any provisions of this Act, it will forward a report of the investigation to the Attorney General of the Federation for possible prosecution. The commission also has functions to monitor and enforce the provisions of this Act and by so doing, promote the economic objectives contained in Section 16 of the Constitution; disseminate such standard practices including international good practice that will result in greater efficiency in the allocation and management of public expenditure, revenue collection, debt control and transparency in fiscal matters; undertake fiscal and financial studies, analysis and diagnosis and disseminate the result to the general public; make rules for carrying out its functions under the Act; and perform any other function consistent with the promotion of the objectives of this Act.

The commission also seeks to harness the resources of the nation and promote national prosperity and an efficient, dynamic and self-reliant economy.  – Culled from The Sun.

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