The executive chairman of the Fiscal Responsibility Commission (FRC), Victor Muruako, Esq., has proposed a formula for achieving sustainable debt levels and profiles for sub-national governments.
Speaking at a one-day dialogue on Fiscal Responsibility and Debt Sustainability organised by the OrderPaper Advocacy Initiative (OAI) in partnership with the FRC, Abuja, and the Kwara State Fiscal Responsibility Commission, Muruako emphasised the importance of implementing the 22-Point Fiscal Sustainability Plan (FSP) and the SFTAS Delivery-Linked Indicators (DLIs) as key strategies for achieving debt sustainability.
“There is no better formula for debt sustainability than a committed execution of the FSP and the SFTAS DLIs,” Muruako stated.
“These measures provide a comprehensive framework for managing public finances responsibly and ensuring long-term debt sustainability.”
The FRC chairman, who was represented by his Special Adviser, Dr Chris Uwadoka, highlighted the dangers of unsustainable public debt, noting that it can severely diminish a government’s ability to deliver essential services and invest in development projects.
“Unsustainable debt can cripple a government’s ability to function effectively and meet the needs of its citizens,” Muruako warned.
“It is crucial for subnational governments to adopt responsible fiscal practices and prioritise debt sustainability.”
Muruako urged state governments to maintain the positive fiscal practices introduced through the FSP and SFTAS, even though these programs have officially ended.
He also reiterated the FRC’s commitment to providing technical support to state governments in their efforts to manage fiscal responsibility effectively.
“The FRC stands ready to assist state governments in implementing sustainable fiscal policies and achieving long-term debt sustainability,” Muruako affirmed.
“We encourage all states to enact dedicated Fiscal Responsibility Laws to further strengthen their fiscal frameworks.”
He also called on all state governments to establish and strengthen independent fiscal responsibility institutions that can monitor compliance with fiscal rules and provide objective advice on fiscal policy.
The FRC Chairman’s remarks underscore the importance of sound fiscal management and debt sustainability for subnational governments.
By adopting responsible fiscal practices and implementing effective debt management strategies, state governments can ensure their long-term financial stability and ability to deliver essential services to their citizens.