The Fiscal Responsibility Commission (FRC) has accused banks and state governments of violating the provisions of the Fiscal Responsibility Act with the attendant negative implications for prudent public finance system in the country.
The chairman of the commission, Barr.Victor Muruako, leveled the allegation against the banks and state government in his address delivered at the just concluded National Summit of Fiscal Responsibility in Abuja.
Lamenting that banks have been aiding state governments in circumventing the law, particularly with respect to borrowing, the fiscal expert cited Section 44.1 of the Fiscal Responsibility Act, which mandates that any government or its agencies intending to borrow funds must present a detailed cost-benefit analysis of the proposed borrowing, to support his claim.
He said: “We are witnessing a troubling decline in accountability. In one instance, a state government’s secretary simply signed a declaration claiming compliance with the Act, which then allowed the government to proceed with borrowing. This is deeply alarming.”
Muruako also carpeted the banks for accepting such documents, pointing out that they have made it convenient to approve loans without thoroughly verifying compliance with the law.
According to him, the commission has “reached out to banks and carried out extensive sensitisation efforts, but it is clear that more needs to be done. We cannot afford to remain silent any longer. This is a matter of national urgency.”
In his remarks at the forum, Secretary to the Government of the Federation (SGF), Sen. George Akume, directed the FRC to extend its technical support to local governments in order to deepen the drive towards fiscal responsibility nationwide.
