Akor Sylvester
11 November 2009
Abuja — CHAIRMAN of the Fiscal Responsibility Commission, Alhaji Aliyu Jibril Yelwa has raised alarm over the spate of foreign and local debts incurred by the three tiers of government. In a paper presented at a meeting for planning and advocacy on Fiscal Responsibility organised by the United Nations Development Programme (UNDP) at the UN House in Abuja, Yelwa said such unwholesome debt profile posed a veritable management and institutional challenges to the implementation of the Fiscal Responsibility Act.
Yelwa particularly singled out some states noted for flagrant violation of the law in the area of borrowing, especially through floating of bonds and sale of treasury bills, saying "Some state legislatures are being stampeded to approve borrowing by government that have less than two years to go, even when what they borrow may have to be repaid in the next ten years."
On its part, Yelwa said the Commission had written to all financial institutions such as banks, Security and Exchange Commission, Debt Management Office, drawing their attention to the provisions of the Fiscal Responsibility Act 2007 as it relates to government borrowing.
He called for concerted efforts by all stakeholders to determine the total debt profile before further borrowing could be encouraged.
Yelwa also appealed to donor support agencies to assist the Commission in fast-tracking "inter-Agency collaboration" so as to determine the local debt profile of the three tiers of government before the second quarter of 2010, adding that this would control the spate of borrowing based on informed data.
In the same vein, Yelwa also frowned at the fact that state and local governments are yet to buy themselves into the Fiscal Responsibility Act, stating that the notion that the Act is only applicable to the federal government was wrong.
In a statement signed by the Head, Press and Public Relations of the commission, Abdulganiyu Aminu and made available to Daily Champion in Abuja, Yelwa also said the Act makes the implementation of the Fiscal Responsibility legislation at the states and local government very daunting, especially as the state and local governments lacked technical capacity and legal framework for fiscal discipline.
He added that they do not have the existing models, records, processes or examples on which to build.
The commission boss said the cheering news is that the Commission is more than willing to guide and assist operators of public financial management on their responsibility as provided under Section 54 of the Act.
This mindset, he added, may hinder the effectiveness of the Act when it is realized that state and local governments control over 48 percent of the nationally shared resources.
According to him, the state governments are all bound by the provisions for the preparation of the Medium Term Expenditure Framework, Savings and Assets Management and the excess Crude Account, Debt and indebtedness and borrowing.
Yelwa advised that when Fiscal Responsibility Law is enacted by the states, there should be a Debt Management Division within its framework even as he called for an independent source of funding for proposed Fiscal Responsibility Commission at the state level, adding that "a specific percentage of the state budget i.e. 05 per cent could be given as budgetary provision to the Agency". This, he added, is the only means by which it could be independent of the executive and also carry out its functions without fear or favour.
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