Lead Director of the CSJ, Mr. Eze Onyekpere, made the appeal when the not-for-profit organization paid a courtesy visit on the Senate President Bukola Saraki on Wednesday.
“Essentially, we do not expect NASS to approve all the requests for borrowing and we do not also expect NASS to reject all the borrowing items. We expect an empirical consideration of each project or programme on the basis of provisions of extant law and policy to determine whether it qualifies to be funded by external borrowing,” Onyekpere said.
According to him, “The loans must be concessional in nature, with low interest rate (not more than 3 percent per annum), reasonably long amortization period, tied to capital expenditure or human development and the projects must be backed by a cost benefit analysis. The Eurobond component of the request which is purely a commercial loan is clearly not within the contemplation of the FRA and legislative approval of same may violate the FRA.”
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He urged the Senate to use the opportunity of the president’s Borrowing Plan request to demand that the Presidency submits “the Consolidated Debt Limit of the three tiers of government in accordance with section 40 (1) of the FRA and pursuant to the provisions of items 7 and 50 of Part I of the Second Schedule to the Constitution of the Federal Republic of Nigeria 1999, as amended.”
The CSJ director expressed the worry that the Fiscal Responsibility Act has largely been more observed in the breach, stressing that it is imperative to strengthen the FRA and its supervising Fiscal Responsibility Commission (FRC) if future MTEFs and Borrowing Plans are to be evidence based.
He noted that the need for borrowing would not have been needed “if all federal agencies are remitting their operating surplus as required by the FRA,” while pointing out that there is no FRC as the tenure of the last commissioners expired over two years ago.
Onyekpere called for reconstitution of the FRC while its enabling law should be amended to provide adequate powers, definition of offences and enforcement mechanisms suitable to its mandate.