The Federal Government has vowed to take steps to address the issue of banks lending money to state governments without adhering to the provisions of the Fiscal Responsibility Act (FRA).
Additionally, the government has directed the Fiscal Responsibility Commission (FRC) to provide increased technical support to local government councils in line with recent developments granting these councils financial autonomy.
These steps are in response to two key events. First, the Supreme Court’s recent ruling that granted financial autonomy to local governments, ensuring they manage their finances independently from state governments.
Second, the federal government is determined to avoid any future embarrassment following the threat by a Chinese company to seize national assets after a state government failed to fulfill its financial obligations in a transaction.
Speaking at the National Summit of Fiscal Responsibility yesterday in Abuja, Chairman, Fiscal Responsibility Commission (FRC), Victor Muruako, expressed deep concern over the role banks play in violating the provisions of the Fiscal Responsibility Act.
