SGF calls on banks to follow FRA rules

The Secretary to the Government of the Federation (SGF), Sen. George Akume has called on banks to follow the rules of the Fiscal Responsibility Act (FRA) when lending to Governments in the Federation and their institutions.

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This was found in a statement made by the Head of Strategic Communications, Bede Anyanwu,  stating that Akume made the call in a keynote address at a Stakeholder Dialogue on Saturday in Lagos.

He said dialogue was aimed at promoting fiscal discipline.

Akume who was represented by a staff in the SGF’s Office Dr. David Eze, affirmed that following the rule was to ensure that borrowing was done the right way for the right reasons to improve fiscal sustainability.

He urged all stakeholders to commit to more prudent management of public finances to achieve desired outcomes.

The Executive Chairman of the FRC, Victor Muruako equally called on all Nigerian banks to adhere to the provisions of the FRA  2007 in their lending practices to government and its agencies.

“The Fiscal Responsibility Act 2007 is Nigeria’s foremost legal framework for the promotion, monitoring and enforcement of fiscal discipline.

“It stipulates in Section 45(2), that lending by banks to governments or their agencies in contravention of the provisions of the Act shall be unlawful.

“PART X of the act provides guidelines for borrowing by government agencies and public institutions, including the requirement for obtaining the necessary approvals and proof of compliance to ensure the sustainability of loans.

“Recognising the critical role that loans play in driving socio-economic development, the FRC brought banks together with regulators, policy makers and government in the Stakeholder Dialogue  to  highlight the  provisions  of the  FRA  on  responsible  lending.

“Discussions focused on measures to enhance compliance to improve the nation’s debt management practices,” the statement said.

The FRC boss emphasised the importance of compliance with the FRA to improve loan performance and to maintain macro-economic stability.

“We are committed to good  corporate  governance,  fiscal  stability  and  the pursuit of economic development to improve the lives of citizens while improving our nation’s   viability.

“We, therefore enjoin all stakeholders to support the bold macroeconomic reform initiatives of the administration of President Bola Ahmed Tinubu  by  ensuring  more  fiscal  discipline  in  line  with  the  provisions  of  the  Fiscal Responsibility Act 2007 (FRA) .”

The chairman said that the  provisions  of the  FRA  serve to  keep the  lender, borrower, regulator, evaluator, assessor, and indeed the beneficiary of public sector loans on the same page.

Mr. Greg  Jobome, Executive   Director,   Risk Management Division, Access Bank who responded   on   behalf  of  the   banks. Said  they will continue to work together with  stakeholders  to foster  responsible lending  practices, transparency, and accountability.

The FRC Stakeholder Dialogue brought together a diverse group of participants including banking Institutions, government representatives, economists, academics and experts in fiscal governance.

NAN/Jacinta A