A Review of the FRBM Act

Abstract

The Fiscal Responsibility and Budget Management Act (FRBMA), 2003 sets fiscal rules that seek to foster fiscal discipline on the Central Government and achieving a balanced budget with effective revenue management. The Act sets targets and suggests means of reducing fiscal and revenue deficits. It has however, had limited success. The targets that were to be achieved by 2008-09 were relaxed because of financial crisis of 2008. However, strict implementation of FRBMA has been a matter of concern. This paper notes that there is an urgent requirement for greater transparency in budget preparation, making the medium-term framework more binding and greater capacity building on the part of government to promote budgetary and debt management institutions.