Fiscal commission cautions states’, LGs on rising debt profile, reckless loans
The Fiscal Responsibility Commission (FRC) has raised concern over the increasing debt profile of states governments and continued funding of projects with loan facility, which the commission considered volatile enough to cripple the nation’s economy.
Besides, the commission had threatened to invoke legal action against commercial banks and other financial institutions who had turned into willing tools of “fiscal carelessness” by granting loans to states without recuse to due process as outline in Fiscal Responsibility Act 2007.
Chairman of the commission, Barr. Victor Muruako, who issued the warning during a sensitisation workshop on Fiscal Transparency and Accountability in Kano, lamented failure of many states government to adopt prudence management of their resources.
Muruako, who explained that current situation of Nigerian economy requires fiscal responsibility from all tiers and levels of government worried that subnational authorities had neglected their commitment to Fiscal Sustainability Plan (FSP).
He warned state governments that already formed the habit of making loans their first and last consideration for meeting revenue shortfalls to desist while urging them to focus more on harvesting their dormant potentials for Internally Generated Revenue.
The FRC boss stressed that despite the Federal Government intervention provided to rescue states government from meeting their financial commitment only 22 states had so far adopted Fiscal Responsibility Act, a conditional commitment that will ensure states executives manage public resource with transparency, accountability and prudence.
He said the workshop is aimed at deepening the frontier of fiscal responsibility, transparency and accountability to subnational levels of government in Nigeria, to enable the grassroot imbibe a culture of transparency and accountability.
“You may also recall that Federal Government wisely tried to leverage on the opportunity to get states to institute measures that would help them manage their public finance with more transparency, accountability and prudence.
“To this effect, the bailout loans was issued which carried a conditionality that benefiting state governments should commit to a fiscal sustainability plan consisting of 22 actions grouped under five objectives. Sadly, four years down the line, many of the states have not met that expectation. Only 22 out of 36 have enacted the Act.”
Earlier, Governor Abdullahi Umar Ganduje pledged to commence the process of domesticating the Fiscal Responsibility Act in Kano.
Ganduje, who made the promise when the FRC team visited him at Government House, said Kano has established one of the most effective Anti-Corruption Commission in the country.
“We already have a Fiscal Responsibility Bill in the pipeline at the State House of Assembly. And when we are through with it, we must have a synergy with your commission and we are going to have homogeneous implementation of the drive together,” Ganduje promised.