The call to states by the chairman of Revenue Mobilization Allocation and Fiscal Commission (RMAFC), Engineer Elias Mbam, to limit their external and domestic borrowing to not more than 20 percent of their monthly allocation from federal account yesterday drew the flak of the Lagos State Governor, Mr. Babatunde Fashola, who described the recommendation as dangerous and counter-productive.
The governor, who spoke at the 6th annual Lagos State House of Assembly public finance lecture held at the Sheraton Hotel, said the recommendation and declaration that states were broke and insolvent could jeopardize the quest for foreign investment in the country.??
Fashola said: “That National Assembly should make a legislation to limit the borrowing power of the state not to exceed 20 percent of what they earn from the FAC, in fact, is the most dangerous recommendation. I will urge the National Assembly to decline for many reasons.
“First, the budget of each state is a matter that is peculiar to the developmental aspiration and it is a matter up on which the elected representatives of that state in the legislatives arm of government have made pronouncement by enacting appropriate laws. They have seen the cash flow, projections and deficits provisions.