The elephant in the room

It’s been about 14 to 15 years since the 18th Constitutional Amendment and the preceding 7th NFC Award; both have now come of age. The amendment resulted in many good outcomes, through its 102 amendments. However, two (out of the 100-plus amendments), which govern the division of revenues between provinces and the federation, have led to some undesired consequences for financial management of the federal government and the country. As a result, the federal government, right from day one of the financial year, is unable to meet its expenses with its revenue resources. The borrowing to cover these expenses is increasing day by day, and if this continues, without any corrective action, the federation may face a tangible threat of insolvency.