Benjamin Kalu, the Deputy Speaker of the House of Representatives, has expressed his concern regarding Nigeria’s heavy reliance on debt, particularly on the occasion of the country’s 63rd Independence anniversary. Speaking at a stakeholders’ dialogue focused on the implementation of Section 45 of the Fiscal Responsibility Act, held in Lagos on Saturday, Kalu emphasized the need for Nigeria to strive for self-sufficiency and independence rather than depending on loans.
Represented by Mr. Nalaraba Abubakar, Chairman of the House Committee on Loans and Debt Management, Kalu criticized the practice of previous governments sustaining budgets through loans, which he deemed unsustainable. He further highlighted the critical importance of financial institutions and banks adhering to the provisions of Section 45 of the Fiscal Responsibility Act before extending loans to any government entity.
Kalu underscored that lending by banks and financial institutions in contravention of the FRA 2007 is unlawful, emphasizing the necessity for these entities to comply with Section 45’s requirements. He stressed the importance of adhering to authorized borrowing limits as specified in the appropriation Act.
Expressing his disappointment, the deputy speaker pointed out that state governments were resorting to borrowing for consumption rather than focusing on long-term capital expenditures aimed at enhancing production. This trend, he argued, exacerbated inflation and hindered economic growth. Kalu urged state governments to tap into their own resources, boost local production, and increase internally generated revenue, reducing their reliance on the Federal Government.
Kalu praised the Fiscal Responsibility Commission (FRC) for its role in promoting transparent and accountable fiscal management in Nigeria but expressed disappointment over the lack of proper records regarding the inflow of grants into the country. He urged commercial banks to collaborate with the government in disclosing information about the sources and recipients of these grants, citing their detrimental impact on the economy.
Kalu confirmed that the 10th Assembly was prepared to introduce legislation aimed at enhancing transparency in the management of grants entering the country. This legislation would also compel commercial banks to disclose grant sources, beneficiaries, and custodians, with the ultimate goal of providing greater oversight and accountability in grant management. Kalu emphasized that these measures were essential for rebuilding the country’s economy, which, in turn, would benefit the activities of banks.
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