The Deputy Speaker of the House of Representatives, Benjamin Kalu has said that Nigeria, at 63, needs to become truly independent and self sufficient instead of depending on loans.
The Deputy Speaker said this while speaking at a stakeholders’ dialogue on the implementation of Section 45 of the Fiscal Responsibility Act, on Saturday in Lagos.
Kalu, who was represented by Mr Nalaraba Abubakar, Chairman, House Committee on Loans and Debt Management, noted that previous governments sustained budgets through loans, an approach he considered not sustainable.
According to him, 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,” he said.
The Deputy Speaker further stated that 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 also 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.
Kalu, who expressed disappointment that state governments were borrowing for consumption rather than focusing on long-term capital expenditure for production purposes, argued that the trend worsens the country’s inflation and inhibits economic growth.
He, however, 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.
Kalu also 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.
He, therefore, confirmed that the 10th Assembly was prepared to introduce legislation that would bring transparency to the processes of grants entering the country, adding that there are plans to enact a law compelling commercial banks to disclose the sources of grants, their beneficiaries, and who holds custody of the funds.
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 banks work together with the government to rebuild the country, because a bouyant economy would also contribute in the activities of the banks too.”
[RipplesNigeria]