UNDERSTANDING PUBLIC FINANCE

The emergence of financial public relations has provided the focus for a wide-ranging discourse concerning the role of financial institutions in imparting adequate knowledge to the public, not only in developed economies but also in developing nations.

            The starting point for the acceptance of the new field of Mass-communication as part of public relations functions is the greater awareness that financial institutions have roles to play in reaching the public at establishing or retaining their confidence for reciprocal appreciation and beneficial relationship.

            It is discovered that while financial institutions have a range of services to offer, little is known because no effort is made at getting the public well informed on those services.  Often times, there is need to refute insinuations, correct misrepresentations and wrong impressions.  

            The public finance institution, as a sensitive agent of government, has tremendous responsibilities at addressing fiscal and monetary policies   as they affect the citizenry, through a simple, unambiguous term that could easily be deciphered by all. Their various publics, including financial institutions, government agencies and the citizens, need to be adequately informed about the emerging trends in the economy which has direct impact on the lives of the society, since macro-economy is defined as a “broad aggregate such as total employment, national income, total volume of savings, investment, consumption, expenditures and money supply” (Aiyedun 1998). Like with other financial institutions, statements and expressions are more often than not measured in figures and laced with financial terms, which may be too technical to the understanding of a large section of the public.

            As is widely held, financial system consists of a network of financial links between economic units, while financial institutions deal in or trade on the use of money.  This will clearly differentiate, for instance, the government institutions dealing with the economy from other financial institutions which are profit-making and issue financial instruments of their own aimed at acquiring funds from savers and allocating accumulated services to firms in the form and amount suitable to them.  The purpose of public relations practice, where the financial public relations emerged, is to establish a two-way communication at seeking common grounds or areas of mutual interests and to establish an understanding based on truth, knowledge and full information (Sam Black). Financial public relations as a subject in communication, therefore, can be vividly comprehended by juxtaposing financial system/institutions with public relations.

In the light of the above, financial public relations is only possible, if the institutions concerned will use the process and method of public relations for financial reporting for effective information dissemination that could establish mutual and beneficial relationship between the economic operators and their beneficiaries.

            It has been observed, over the years, that financial institutions make efforts at creating public awareness on the economic activities but unfortunately, little is known and it creates rooms for misinformation and bashing in the media. These problems of inadequacy of effective and proper public enlightenment make the public skeptical, doubting any programme of the government and services provided by private companies.

            Since its establishment in 1988, for instance, many Nigerians were not aware of the existence of Revenue Mobilisation Allocation and Fiscal Commission, until after its inauguration in 1999, when Engr. Hamman A. Tukur, the Chairman of now constitutional body, took the bull by the horn, and takes the strategic public relations steps before the public comes to be aware that, it is responsible for monitoring the accruals and the disbursement of revenues from the Federation Account to Federal, States, Local Governments and other special agencies on monthly basis; and also responsible for determining the remuneration packages for all the public and political office holders. The strategic public relations campaign earns the organisation a lot of respect from the country’s leadership and the populace.

            On the other hand, the annual federal budget, which is prepared by the government, always receives condemnation even before its release.   The positive effect of maintaining foreign reserves and the benefit of some government fiscal policies towards revamping the economy, hardly receive public goodwill even though they receive media attention. The authority concerned needs to brace up and monitor the trend to respond positively before the public makes any anticipated outcry.

            All these problems are borne out of ignorance and lack of adequate information management techniques from the organisation whose duty is to enlighten the public about the economic direction.

            Because of the absence of effective publicity on the finances of the government for public appreciation, it creates problems that deserve to be studied, in order to find out the level of public ignorance and how to address it.  Though several studies might have been conducted in the area of public relations, only few works are available on financial public relations.  This study is yet another attempt at finding solutions to social problems relating to public finance and mass-communication.

MINISTRY OF FINANCE

The Federal Ministry of Finance of the Federal Republic of Nigeria is perhaps the most sensitive ministry in the country.  It occupies a prime position in the socio-economic development of the nation, as it is responsible for the formulation and implementation of economic policies of the government, both fiscal and monetary, through direct and indirect guidelines and directives. It is also the government’s fiscal institution that is responsible for the fiscal and monetary policies of the nation and general economic policy formulations by preparing and implementing annual government budgets.

The responsibilities of the Federal Ministry of Finance are stated in clear terms by legislation, acts and official gazettes.  According to the Bank Act 1969, the Minister of Finance, for instance, has the power to licence banks and revoke their licenses, reacts to the Central Bank of Nigeria’s meeting and banking policy, currency or proposals; and receive copies of the report of the bank examiners of CBN (Agere16). In addition, the Federal Government Gazette of July 1975 stated other responsibilities bestowed on the Honourable Minister of Finance to include banks and banking, capital issues, public debts, Nigeria Security Printing and Minting NSPM, internal borrowing, monetary policy, credit control, currency, coinage and exchange control.

            The Ministry is structured with eight departments in addition to three extra-ministerial agencies.  It has statutory three service departments of finance and supply, planning research and statistics and personnel management.  The operational departments that handle the general finance and economic matters of the nation are the departments of Home Finance, African Bilateral and Economic Relations, Multilateral Institution, External Finance, and Foreign Exchange.  There is also the office of the Accountant General of the Federation, Budget Office, apart from other government financial agencies, which report to the Ministry.  These include the Federal Inland Revenue Service, Nigeria Customs Service and National Insurance Commission (formerly known as National Insurance Supervisory Board).  The Internal Audit Unit, Legal Unit and Public Relations and Information Unit, are integral parts of the Hon. Minister’s office.

            The Ministry regulates the entire economic direction of the government by coordinating the activities of the Central Bank, National Insurance Commission, Nigerian Printing and Minting Company, disbursements of funds from the Federation Account and that of Value Added Tax (VAT) to all tiers of government, monitor all the revenues accruing to the government from relevant agencies, i.e., Federal Inland Revenue Service and Nigeria Customs Service.  The Ministry also regulates the activities of all the financial institutions in the country.

            The ministry is a non-monetary and non-profit-making financial institution.  Through its departments, the Ministry recommends to other agencies of government that oversee the activities of other financial institutions. For instance, the Department of Home Finance which has a banking division, receives recommendations from the Central bank, Nigeria Deposit Insurance Corporation (NDIC), Securities and Exchange Commission (SEC) and National Insurance Commission (NAICOM) on actions to be taken on the banking and insurance sectors of the economy.  The Foreign Exchange and Multilateral Department are responsible for establishing favourable and profitable relationships with international finance institutions. They also study the trends in the International Monetary System (IMS), which is defined as “the rules, institutions, policies and practice regarding the adjustment and/or financing of external balances, the creation and distribution of international liquidity and determination of exchange rate”(UNDP/UNCTAD, 1983) Agere P.45.