17 August 2014

Nigeria: ICAN President - Funding Recurrent Expenditure With Debt Inappropriate

The President, Institute of Chartered Accountants of Nigeria (ICAN), Mr. Chidi Onyeukwu Ajaegbu, has said the policy of borrowing to fund recurrent expenditure in the national budget is wrong.

Ajaegbu pointed this out at a media luncheon on the 44th Annual Accountants' Conference, which will hold in September, and noted that by adopting such measure, government was truncating the future economic development because it was spending unearned income.

According to him, "It is observed that despite low level of budget implementation, we have been operating deficit budgets in Nigeria. The practice of funding recurrent expenditure through debt is unacceptable. It is tantamount to spending unearned income and therefore mortgaging the future by abating possible future economic development."

Ajaegbu advised the federal government to address the negative policy addressed urgently as it is unsustainable.

The ICAN boss identified avoidable delays in the passage of the fiscal bills as the cause of poor implementation of the annual budget. He canvassed for the enactment of a law, which will define the nation's budget cycle with specific timelines for each stage and sanctions for a breach of this law.

Ajaegbu, who noted that a nation's economic development is largely dependent on the educational standard of the citizens, lamented that the Nigerian educational system had over the years been crying for effective and efficient attention.

"Even though the federal government has made efforts to address the challenges, the faint measures still appear very little. My institute is hereby calling on the government to step up its efforts at revamping the nation's educational system. A poor educational system is likely to feed unto professional education and training with severe negative consequences."

Similarly, Ajaegbu spoke on the recent nationwide strike of the Judiciary Staff Union of Nigeria to protest the non-compliance with the orders of the Federal High Court, Abuja on the financial autonomy and independence of this arm of governance.

He said: "In order to avoid promotion of impunity on the part of government and to grow our nascent democracy, government needs to vigorously pursue and maintain the independence of the Judiciary by implementing the first charge against the Consolidated Revenue Account as prescribed in the 1999 Constitution of the Federal Republic of Nigeria."

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