Charles Abana, the Head of the Directorate of Legal Investigation and Enforcement at the Fiscal Responsibility Commission, has called on governments at all levels to halt excessive borrowing and focus on internal fiscal reforms. He believes that this will help to minimize the risk of fiscal stress and satisfy growing demands on public finances related to population ageing, climate change, low growth, inequalities, accelerated digitalisation, and cyclical demand stabilisation.
At a one-day media-civil society roundtable on fiscal responsibility and debt management organised by the Order Paper Advocacy Initiatives in Ilorin, Kwara State, Charles Abana emphasized that excessive borrowing can lead to a budget deficit, which is the gap between spending and income. This can have negative consequences on the economy, such as high interest payments on national debt. Therefore, it is crucial for governments to strike a balance between borrowing and internal fiscal reforms.
Governments should focus on internal fiscal reforms to minimize the risk of fiscal stress and satisfy growing demands on public finances. This can be achieved by reducing overhead capital and the cost of governance to make more resources available for developmental capital. Each of the capital expenditures should have a proper cost-benefit analysis open to the public. In addition, more public assets should be slated for privatisation so as to increase resources expected from the privatisation exercise while reducing recurrent expenditure.