The House of Representatives at its plenary session on Thursday, March 3rd 2016 called for the implementation of Section 42(1) of the Fiscal Responsibility Act of 2007(F.R.A) which states that;
“The President shall within 90 days from the commencement of the Act and with advise from the Minister of Finance subject to approval of National Assembly, set overall limits for the amounts of consolidated debt of the Federal, State Governments pursuant to the provisions of items 7 and 50 of Part I of the Second Schedule of the constitution. Section 42 of the F.R.A also provides that the limits and conditions approved by the National Assembly, shall be consistent with the rules set in the F.R.A , 2007, and with the fiscal policy objectives in the Medium term fiscal Framework”.
Moving the motion, Hon. Chukwudi Onyereri (PDP: Imo) observed that since the coming into force of the Fiscal Responsibility Act in 2007, no president has complied with the mandatory provision to set an overall limit for the amounts of consolidated debts of the Federal, States and Local Governments. He also stated that the main objectives of the provision is to ensure that no tier of government borrows when it is not necessary. Nonetheless, he noted that where borrowing is necessary, the venture must be verifiable, and the government in question should demonstrate a capacity to repay.
Hon. Onyereri also expressed concerns that the failure of all the tiers of government to comply with the mandatory requirement of the Act is responsible for the debt profile of all the tiers which shows indiscretion in the borrowing process and has worsened the economic profile of most states. He also noted that the continuous refusal to conform to the Act would ultimately defeat its intent. Hon. Onyereri then called on President Muhammadu Buhari to initiate implementation of Section 42 of the Fiscal Responsibility Act, 2007, within 90 days.
The motion which was unanimously adopted has been referred to the House Committee on Finance for further legislative input.
