The federal government has warned state and local governments across the country not to take loans from banks or other financial institutions without first getting a Certificate of Proof of Compliance from the Fiscal Responsibility Commission.
It said such borrowing is against the law and can attract serious legal action.
This warning was directed especially at the 23 local government chairmen in Kaduna State by the Director of Legal Services, Investigation and Enforcement at the Commission, Barrister Charles Chukwuemeka Abana, who spoke at a financial management workshop in Kaduna.
A statement from the Commission, signed by its Director of Strategic Communication, Bede Ogueri Anyanwu, said Abana represented the Executive Chairman of the Fiscal Responsibility Commission, Victor Muruako, at the event organised by the Kaduna State Fiscal Responsibility Commission.
Abana told the council chairmen that under the Fiscal Responsibility Act of 2007, governments are only allowed to borrow for projects that build long-term value, such as infrastructure and human development, and not for everyday running costs.
He warned that any bank or financial institution that gives loans outside the law is also breaking the rules, while public officers who ignore the law could face serious consequences.
He noted that other agencies at the workshop presented papers on ethical leadership, proper procurement, and fighting corruption, all geared towards ensuring that public funds are used wisely at every level of government.