FG to sanction banks aiding states’ fiscal crisis

The federal government may clamp down on banks and other financial institutions aiding “fiscal carelessness” by granting loans to states without regard to due process. Executive Chairman of the Fiscal Responsibility Commission (FRC), Victor Muruako, stated this in Lagos at a fiscal transparency and accountability sensitization workshop. This is just as he advised subnational governments […]

The federal government may clamp down on banks and other financial institutions aiding “fiscal carelessness” by granting loans to states without regard to due process.

Executive Chairman of the Fiscal Responsibility Commission (FRC), Victor Muruako, stated this in Lagos at a fiscal transparency and accountability sensitization workshop.

This is just as he advised subnational governments to stop making loans their first and last consideration for meeting revenue shortfalls.

Instead, he said they should consider ways of “harvesting their dormant potentials for internally generated revenue.”

The workshop, facilitated by Order Paper, was attended by representatives of state governments, members of the National Assembly, and the Civil Society Organisations (CSOs).

It was aimed at deepening the frontiers of fiscal responsibility, transparency and accountability to sub-national levels of government in Nigeria and encouraging states that are yet to domesticate the Fiscal Responsibility Act to do so.

Daily Trust reports that 23 states have domesticated the FRA while 13 – Edo, Rivers, Imo, Akwa Ibom, Kano, Katsina, Borno, Plateau, Ogun, Oyo, Zamfara, Ondo and Benue – are yet to pass the law.

He decried the failure of states to pass the law which was one of the conditions for granting bailout funds in recent times with the hope that they would commit to the FG’s fiscal sustainability plan anchored on improving accountability and transparency, public financial management, increasing public revenue and ensuring sustainable debt management.

Reiterating that transparency, accountability and prudence in public finance management are prerequisites for overcoming the nation’s economic challenges, he said states should desist from making loans as first and last resort.