by Fiona Nanna, ForeMedia News UK

Tuesday, June 4th, 2024

10:20 AM

In a groundbreaking move, the Presidential Fiscal Policy and Tax Reform Committee has unveiled a proposal to revolutionize the disbursement of funds across the three tiers of government. The committee aims to transition from the traditional monthly allocation system to a more dynamic and efficient daily disbursement strategy for the Federation Account Allocation Committee (FAAC).

During a public consultation workshop held in Abuja on Monday, Chairman Taiwo Oyedele passionately emphasized the urgent need to modernize the current disbursement mechanism. He likened the existing system to antiquated practices dating back to 1814, highlighting the importance of embracing innovation and progress.

Under the proposed reform, FAAC would undergo a significant shift in its operations. Instead of relying on the monthly allocation meetings, funds would be disbursed on a daily basis, ensuring a more timely and responsive distribution to local, state, and federal governments. This transformation would streamline operations, allowing FAAC to focus its monthly meetings on broader national fiscal strategies rather than routine reconciliations.

The committee’s proposal has garnered widespread support from key stakeholders, including the esteemed endorsement of the Accountant General of the Federation. This level of consensus reflects the recognition of the potential benefits that daily disbursement can bring to Nigeria’s financial landscape.

Moreover, Chairman Oyedele addressed the issue of collection costs, highlighting the need for efficiency and accountability. He stressed that agencies unable to collect revenue at a reasonable rate, such as one percent, should reconsider their role in revenue collection. By focusing on the primary mandates of government agencies, it is expected that their efficiency and competence in revenue collection will significantly improve.

Chairman Oyedele drew attention to countries like South Africa, where collection costs are successfully maintained under one percent. This serves as a model for Nigeria to follow in order to enhance revenue collection and optimize the allocation of funds to critical areas of development.

The proposed daily disbursement of FAAC funds represents a transformative step towards modernizing Nigeria’s fiscal policies. If implemented, this reform has the potential to revolutionize the way funds are distributed, ensuring more efficient and effective utilization of resources for the betterment of the nation.