Fiscal Responsibility Commission has vowed to engage the services of the Independent Corrupt Practices and Other Related Offences Commission and the Economic and Financial Crimes Commission to deal with banks that give loans to governments and agencies without following due process.
It also warned the state governments to reduce fiscal deficits, build revenue surplus and ensure effective resource allocation and prudent debt management. The Chairman, FRC, Victor Muruako, spoke during the two-day fiscal transparency and accountability sensitisation workshop in Lagos on Monday with the theme ‘Fiscal transparency and sustainable development at the sub-nationals’.
He said, “As for banks and other financial institutions that make themselves willing tools of fiscal carelessness by granting loans to some sub-national governments without regard to due process, the commission hereby reminds them that Section 45(2) in Part X of the Fiscal Responsibility Act 2007, which specifies conditions for borrowing by ‘any government in the Federation or its agencies and corporations’, reads as follows:
‘Lending by banks and financial institutions in contravention of this part shall be unlawful.’ “In line with the foregoing, the commission hereby serves notice to defaulting banks and other financial institutions that the window of just using moral suasion is closing.
