Benjamin Kalu, the Deputy Speaker of the House of Representatives, has voiced his concerns about Nigeria’s dependence on debt as the country marks its 63rd Independence Anniversary.
During a stakeholders’ dialogue on the implementation of Section 45 of the Fiscal Responsibility Act held in Lagos on Saturday, Kalu emphasized the need for Nigeria to achieve self-sufficiency and independence instead of relying on loans.
Kalu, represented by Mr. Nalaraba Abubakar, Chairman of the House Committee on Loans and Debt Management, expressed his reservations about the past practice of sustaining budgets through loans, which he deemed unsustainable.
Furthermore, he highlighted the significance of compliance with the provisions of Section 45 of the Fiscal Responsibility Act for banks and other financial institutions before extending loans to any government within 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 authorized 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 potential and enhance local production to increase internally generated revenue instead of relying solely on the Federal Government.
“We encourage states to stop depending on the 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 the inflow of grants into the country had no proper record of the grants.
“These grants do not just pass through thin air, but by processes, in which the commercial banks are involved.
“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, the accumulation of those aids and grants is 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 pinpoint 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.”
