The Federal Government has warned state and local governments against obtaining loans from financial institutions without a Certificate of Proof of Compliance from the Fiscal Responsibility Commission (FRC), stressing that such actions violate the law and carry serious legal consequences.
The warning was issued during a financial management workshop attended by the 23 local government chairmen in Kaduna State. Charles Abana, FRC’s Director of Legal Services, Investigation and Enforcement, represented the Executive Chairman, Victor Muruako, at the event organised by the Kaduna State Fiscal Responsibility Commission.
The commission reminded subnational governments that the Fiscal Responsibility Act of 2007 prohibits borrowing for recurrent or day-to-day expenses. It noted that any loans must be used solely for capital projects, including infrastructure and human development initiatives, which provide long-term benefits.
In a statement by FRC’s Strategic Communication Officer, Bede Anyanwu, the agency condemned the misuse of public funds without budgetary approval, describing it as “fiscal haram” that undermines public trust and hinders development.
“Every kobo spent must deliver value for money. Public resources must be properly planned, budgeted, appropriated, and disbursed to projects that positively impact the lives of citizens,” the statement said.
The FRC also cautioned local government leaders against diverting funds to friends, political supporters, or unverified payroll entries. Financial institutions, particularly banks, were advised to comply strictly with the law when granting loans, as public officers who ignore regulations risk sanctions.
Governor Uba Sani was commended for supporting reforms that promote transparency and accountability. He called on public officials to act with honesty and integrity, emphasising that public trust is earned when funds are prudently managed.
Sani Bako, Executive Chairman of the Kaduna State Fiscal Responsibility Commission, described the workshop as a critical step toward strengthening fiscal management at the local level. He welcomed support from agencies including the Code of Conduct Bureau, the Economic and Financial Crimes Commission, the Bureau of Public Procurement, and the Centre for Fiscal Transparency and Public Integrity.
Bako noted that effective public financial management is essential for sustainable development, better infrastructure, improved schools, and overall economic growth. He added that presentations at the workshop highlighted ethical leadership, transparent procurement, and anti-corruption strategies to ensure public funds are used responsibly across all tiers of government.
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