Bailout funds: Fundamental checks should have been employed – FRC Chairman

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Abuja – Mr Victor Muruako, Acting Chairman, Fiscal Responsibility Commission (FRC), said that adoption of the Fiscal Responsibility Act should have been a condition for the states before they were given the bailout funds.

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Speaking with the News Agency of Nigeria (NAN) on Monday in Abuja, he said that the Act was only operational at the federal level.

According to him, with such a condition, states could be made to account for how they use their funds, otherwise the bailout funds too could be mismanaged or diverted.

“I was thinking that the prior condition before the bailout could be given to any state should have been you must sign up to the law.

“You must also live up to the principles of a new fiscal responsibility regime.

“The risk is that even the bailout funds, as we are already hearing, can also be mismanaged in such a way that will not make for fiscal responsible spending.

“I know there were conditions attached but we are thinking that there should have been some fundamental checks.

“You find out how the states used their funds first, and then there should be a prior condition that you must sign up to the new regime of fiscal responsibility,’’ he said.

Muruako said that states could be fiscally responsible by stating clearly how the funds were used.

He also said that adopting the act could avoid further bailouts.

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“By signing up to the law you would have adopted the law at your state level and you will start immediate implementation and that would avoid further bailouts.

“At the end of the day they (states) would still be required to pay back and since it is not magic they would definitely be under pressure to pay back,’’ he said.

Muruako, however commended the Federal Government for assisting the states that needed the fund, saying that it was a good decision.

He said that if the Federal Government had not bailed the states out, the situation would have worsened and that it would have affected the entire nation.

“It is a macro economy, it is one economy and it is not like the economy of the states and the local governments are different from the federal economy.

“So what happens here affects the other one,’’ he said.

The chairman, however, appealed to states to adopt the Fiscal Responsibility Act to ensure accountability and transparency in governance. (NAN)

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