Transparency, probity and accountability in fiscal operations as panacea for economic development.

Abstract

The view of the paper is that the experience of public sector failure in Nigeria is not an indictment of fiscal management theory but a reflection of the political and economic environment resulting from the absence of fiscal transparency and probity in management of government finances. This position was corroborated in the report of the collaborative review of Federal Government Expenditure by the officials of the Federal Government and the World Bank (March 1996). It was observed that Nigeria's tremendous potential for growth and poverty reduction has yet to be fulfilled. A key constraint has been the recent conduct of macroeconomic particularly fiscal, policies. These have led to rising inflation, falling growth and declining real incomes. The public delivery of services is poor and deteriorating. Moreover, there has been little transparency and accountability in the management of public resources. The low or absence of adherence to principles of transparency and accountability inadvertently have blunted the efficiency of fiscal policy instruments, and resulted in poor economic performance and low economic development, considerably lower than the potentials of the national economy can produce. Therefore, there is need to restore sound fiscal management under conditions of strict good governance. This is the only way to move the Nigerian economy towards the achievement of sustainable economic development with high dividends in poverty alleviation and higher social welfare. The rest of the paper is presented in four parts. Part II is a conceptual overview of fiscal transparency and economic development while Part Ill reviews briefly the fiscal operations of the Federal Government and the nation's economic performance between 1990 and 1999. Part IV assesses the prospects for fiscal transparency and economic development in Nigeria while Part V is the summary and conclusion of the paper.