Fiscal discipline crucial for maximising reforms’ benefits, Agora Policy tells FG

Agora Policy, a think tank, says fiscal discipline is crucial for maximising benefits from the reforms of the federal government.

The organisation made the recommendation in a report, titled, ‘FG’s Fiscal Policy Horizon Remains Cloudy’.

In the report, released on Friday, the group said fiscal authorities cannot pursue expansionary policies while the monetary authorities are on a contractionary path — advising that monetary, trade, and fiscal policies must align.

“For a country battling with a high debt burden, expanding budget deficit, and strangulating inflation, the different actors in the economic policy arena should be singing from the same hymn sheet of inflation control and fiscal consolidation,” Agora Policy said.

“In conclusion, we submit that sustained fiscal discipline is crucial to ensure that the potential gains from fiscal reforms are maximised for the benefit of citizens.”

This, Agora Policy, said this would require improved transparency and accountability in public financial management.

In addition, the company said there is a need for sustained and strategic investments in social welfare programmes, infrastructure, and human capital development, which would make growth more inclusive and close socioeconomic disparities.

“The different policy arms need to work in concert, not at cross-purposes,” the firm said.

The think tank said reducing government costs urgently is crucial to building more confidence in the federal government and fiscal institutions, noting that trust as a social capital in Nigeria is near zero.

According to the report, Nigeria must continue to prioritise fiscal discipline and efficiency.

Agora Policy said rationalising expenditures (particularly recurrent) and allocating resources toward vital sectors such as infrastructure, education, and healthcare, is imperative.

“FG should continue to prioritise fiscal discipline and efficiency. Beyond the quest to increase spending, the quality of spending needs to improve which will require a framework for improving the efficacy of expenditure on some social sectors like tertiary education, healthcare and housing,” the report reads.

The think tank further urged the government to take urgent measures to improve oil and non-oil revenue.

Agora Policy also said the government needs to ways to attract development finance and private finance “into infrastructure delivery by a more efficient use of guarantees and commitments”.

In addition, the think tank said debt management requires careful attention to avoid a debt crisis.

Acknowledging that borrowing can be a useful tool for financing development projects, the organisation said it must be done judiciously.