Lagos, Oct. 8, 2023: The Deputy Speaker of the House of Representatives, Benjamin Kalu, has expressed concern about Nigeria’s reliance on debt at 63 years of Independence anniversary.
Speaking at a stakeholders’ dialogue on the implementation of Section 45 of the Fiscal Responsibility Act, on Saturday in Lagos, Kalu said the nation needs to be self-sufficient and independent instead of relying on loans.
Kalu, represented by Mr Nalaraba Abubakar, Chairman, House Committee on Loans and Debt Management, said previous governments sustained budgets through loans but an approach he considered not sustainable.
He also said that the compliance of the provisions of Section 45 of the FRA remains crucial to the banks and other financial institutions before lending to any government of the federation.
“Lending by banks and financial institutions is contravention to the FRA 2007 is unlawful,” the lawmaker said.
Kalu said it was imperative for banks and financial institutions to comply with the provisions outlined in Section 45 of the Fiscal Responsibility Act before they lend to the government.
He noted that it was essential to consider the authorised borrowing limit specified in the appropriation Act and adhere to the extant provisions of Section 45.
The deputy speaker expressed his disappointment that state governments were borrowing for consumption rather than focusing on long-term capital expenditure for production purposes.
According to him, the trend worsens the country’s inflation and inhibits economic growth.
Kalu urged state governments to explore their own potentials and enhance local production to increase internally generated revenue instead of relying solely on the Federal Government.
“We encourage states to stop depending on federal government and boost their local production, thereby increasing internally generated revenue.
“I commend FRC in its responsibility of keeping up with promoting a transparent and accountable government fiscal management framework for Nigeria,” the deputy speaker said.
He, however, expressed disappointment that the authorities in charge of monitoring inflow of grants into the country had no proper record of the grants.
“These grants do not just pass through the thin air, but by processes, which the commercial banks are involved in.
“It is important for commercial banks to liaise with the government by making disclosure on the inflow of the grants,” he said.
According to him, accumulation of those aids and grants are crippling the economy, which has become unbearable.
Kalu confirmed that the 10th Assembly was prepared to introduce legislation that would bring transparency to the processes of grants entering the country.
He said it also plans to enact a law compelling commercial banks to disclose the sources of grants, their beneficiaries, and who holds custody of the funds.
He noted that these measures aim to provide greater oversight and accountability in the management of grants in the country.
The lawmaker said: “We have billions of dollars coming into Nigeria as grants, but cannot pin point where the grants are going into in the economy.
“So, it’s important that the commercial work together with the government to rebuild the country, because a bouyant economy would also contribute in the activities of the banks too.”
