The Secretary to the Government of the Federation (SGF), George Akume, has called on banks to follow the Fiscal Responsibility Act (FRA) provisions when lending to governments in the federation and their institutions.
A statement by Bede Anyanwu, the Fiscal Responsibility Commission (FRC) spokesperson, said Mr Akume made the call in a keynote address at a stakeholder dialogue on Saturday in Lagos.
Mr Akume, represented by David Eze, a staff in the SGF`s office, affirmed that following the rule was to ensure that borrowing was done the right way for the right reasons to improve fiscal sustainability.
He encouraged 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 the government and its agencies.
He cited section 45 (2) of the Fiscal Responsibility Act 2007, stipulating that lending to governments or agencies without compliance with the provision was 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,” he added.
The FRC boss emphasised the importance of compliance with the FRA to improve loan performance and maintain macroeconomic stability.