Preamble
A critical review of activities within our diverse homes, social clubs, religious circles, corporate organisations, professional affiliations, and, more importantly, government quarters depicts that a lot needs to be done in inculcating the virtues of financial discipline in the way and manner we handle resources entrusted to our care.
No sane economy can experience meaningful growth, and by extension development, without strict financial discipline observed by all and sundry.
Understanding economic growth
Economic growth refers to an upward movement in the capital component of an economy to produce goods and services from one period to another for a minimum of two consecutive quarters. A corollary to this is economic development, which focuses on improving the fiscal, monetary, economic, and social well-being of the masses.
Financial discipline explained
Financial discipline is rooted in Scripture, as evidenced in Proverbs 13:18, which states that “whoever disregards discipline comes to poverty and shame, but whoever heeds correction is honoured.”
Professionally, financial discipline encompasses all habits and practices that assist individuals or corporate entities to manage their finances judiciously, toward achieving financial stability and reaching long-term financial objectives.
Eliciting economic growth via financial discipline entails the full implementation of policies and practices that promote financial stability, fiscal responsibility, and sustainability.
The main strategies to be put in place include, but are not limited to:
strong adherence to budget and budgetary procedures;
investment in critical areas;
an aggressive saving culture;
maintenance of key macroeconomic stability;
promotion of financial inclusion;
debt management procedures;
financial planning mechanisms;
strict expenditure control;
risk management procedures; and
good governance, which will form the bedrock of this write-up.
Good governance explained
Good governance is defined in international development literature as the way public institutions conduct public affairs and manage public resources for the overall good or interest of the citizenry.
Interestingly, good governance, as popularised by several renowned management scholars and political scientists across the world, was clearly explained by the UK’s Nolan Committee in its 1995 documentary report. The report highlighted seven distinctive principles of behaviour expected of government or public officials within the United Kingdom and, by extension, other democracies across the globe. These principles, selflessness, honesty, integrity, leadership by example, accountability, objectivity, and openness, are relevant to politicians, civil servants, public sector bodies, corporations, and not-for-profit organisations alike.
From my personal understanding, no country can develop economically without a corresponding good governance structure put in place by its leaders.
Good governance: An exit way out of economic downturn
Undoubtedly, the demonstration of good governance by leaders at all levels, local, state, and federal, will yield positive outcomes for economic development. Such outcomes include rural electrification projects, universal housing provision, consistent electricity supply in both urban and rural areas, ample food availability, access to clean drinking water, well-maintained roads, universal education, free healthcare services, inclusive governance structures, fair and transparent electoral processes, robust citizen security, promotion of financial discipline, adherence to accountability, zero tolerance for corruption, effective resource management, enhancement of public trust, reduction of wasteful expenditure, promotion of the rule of law, rigorous value-for-money audits, cost minimisation, and fostering a culture of savings for future needs.
As we gear up to commemorate the 2025 Independence anniversary under the administration of President Bola Ahmed Tinubu, GCFR, our request to leaders at all levels, local, state, and federal, as well as across the executive, legislative, and judicial arms, is simple: deliver good governance.
Good governance is a critical driver for the attainment of financial discipline. An effective governance system promotes accountability, transparency, and responsible management of finances. Furthermore, good governance translates into a high level of financial discipline, which in the long run will boost economic growth.
Economic growth and financial discipline can be viewed as inseparable Siamese twins. This is a clarion call to all to imbibe the virtues of good governance and promote democratic values wherever we find ourselves, as this will foster both financial discipline and economic development.
The onus lies on all of us to vigorously pursue good governance, which in turn will promote financial discipline, thus facilitating economic growth over time.
Dr Kingsley Ndubueze Ayozie FCTI, FCA, is a public affairs analyst and chartered accountant. He writes from Lagos.
