IMF Urges Nigeria’s Fiscal Watchdog, Debt Office to Strengthen Collaboration to Avert Risk Crisis
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Nigeria’s long-term fiscal stability is under threat, prompting the International Monetary Fund (IMF) to demand a critical and immediate strengthening of cooperation between the Fiscal Responsibility Commission (FRC) and the Debt Management Office (DMO). This urgent call for synergy was the central outcome of a high-level bilateral meeting in Abuja focused on reviewing and bolstering Nigeria’s framework for managing burgeoning fiscal risks.
IMF Pushes for Transparency and Governance
The IMF delegation, led by Sybi Hida, Senior Economist in the IMF Fiscal Affairs Department, met with top FRC officials, including Special Adviser to the Executive Chairman, Dr. Chris Uwadoka, and the Director of Legal, Investigation & Enforcement, Mr. Charles Chukwuemeka Abana.
Hida explicitly stated the Fund’s mission was to rigorously assess the FRC’s progress in identifying, monitoring, and managing the nation’s fiscal vulnerabilities. He forcefully emphasized that effective fiscal-risk management is a cornerstone of good governance, calling for greater openness and frankness in the official reporting of these vulnerabilities. The message was clear: institutional collaboration and transparency are non-negotiable for safeguarding the economy. 
A Multitude of Threats to Fiscal Health
During a technical session, Mrs. Rachael Angbazo delivered a detailed presentation on the FRC’s pivotal role in monitoring fiscal risks, illuminating the major sources of economic peril.
The most pressing sources were identified across several domains.
Macroeconomic risks are significant, driven by inherent instability in the oil sector, persistent inflationary pressures, volatile exchange rate fluctuations, and a climbing interest rate environment.
Institutional and governance risks further compound the problem, primarily stemming from weak compliance with the provisions of the Fiscal Responsibility Act (FRA) 2007. 
Furthermore, the government faces substantial exposure from contingent liabilities, which include government loan guarantees, obligations arising from Public-Private Partnerships (PPP) contracts, and outstanding judgement debts.
Finally, the nation is battling critical environmental, security, and social risks, notably devastating flooding, pervasive insecurity encompassing Boko Haram, banditry, and other forms of criminality, and serious public-health threats like Lassa Fever.
Angbazo detailed the FRC’s legal and operational mandate to enforce fiscal rules, support forecasting via the Medium-Term Expenditure Framework (MTEF) guidelines (Section 11), maintain deficit thresholds (Section 12), and promote transparency through mandatory fiscal-risk reporting (Section 19).
The Commission’s proactive work includes monitoring MTEF implementation, aiding sub-national governments in drafting fiscal responsibility laws, and enhancing legislative oversight of revenue remittance. It also includes comprehensive oversight of borrowing, nationwide verification of capital projects, and enforcement of audited-account disclosure by Ministries, Departments, and Agencies (MDAs) and Government-Owned Enterprises (GOEs).
Capacity Gaps and Calls for Legislative Power
Despite these initiatives, the meeting thoroughly examined key limitations preventing the FRC from operating at full capacity. Primary challenges include severe funding and capacity limitations, which prevent the Commission from undertaking advanced fiscal-risk modelling and scenario testing. This is compounded by inconsistent and poor reporting practices by MDAs and GOEs, and, most crucially, the FRC’s limited financial and institutional independence.
To overcome these structural impediments, the high-level talks produced a set of critical recommendations. These include urgently amending the FRA to grant the FRC necessary prosecutorial powers and the authority to impose sanctions on non-compliant entities. The recommendations also call for clarifying the application of FRA Section 12(2) to prevent its potential abuse under vague emergency claims. Internally, a focus must be placed on building robust capacity for fiscal-risk analysis and scenario testing, while externally, the meeting demanded the institutionalization of comprehensive fiscal-risk reporting and strengthening of inter-agency coordination.
The DMO, represented by Bartholomew Aja and Salisu Ahmed, affirmed its commitment to greater cooperation, and a consensus was reached that the FRC must be fully integrated into future Debt Sustainability Analysis (DSA) processes.
Closing the meeting, Sybi Hida specifically directed the FRC to intensify its focus on addressing legal and capacity-related risks, restating the IMF’s readiness to provide technical assistance.
The final consensus reinforced the foundational truth: robust fiscal-risk management, anchored on transparency, strong institutional collaboration, and data integrity, is the ultimate requirement for securing Nigeria’s fiscal future.
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