Fashola signs Financial Regulations Bill into law

By Olasunkanmi Akoni & Monsur Olowoopejo
LAGOS — Governor Babatunde Fashola of Lagos State, yesterday, signed into law the Lagos State Financial Regulations Bill, which limits the power of state government, 20 local government areas and  37 Local Council Development Areas chairmen in the state to borrow money for capital expenditure.
While assenting to the bill, Fashola said the law would lead to probity and accountability by local government administrations as it would ensure that funds were only utilised for the common good of the people.
He said: “The law will also help the state government to improve its service delivery to residents, as it would guarantee the judicious use of the state’s scarce resources to benefit the generality of the people.”
Fashola said the law required council chairmen to seek approval from the state legislature as well as the consent of the governor before borrowing.

It also states that borrowing by councils‘ chairmen can only be approved for financing infrastructural development within the local government areas and not for any other purposes.
“This law will help regulate the state and the local government areas in the way that the funds put to the trust of public officers are well managed. It will help administrators utilise these funds in the manner that gives the greatest value for money by limiting the power of the government to borrow to fund capital expenditure.
“This law is in consonance with the challenges faced by this country today. The challenge of urgent need to renew decadent infrastructure and urgent need to provide new infrastructure in the various states,” the governor said.
Presenting the bill for Fashola’s assent, Mr Ajibayo Adeyeye, Majority Leader of the state House of Assembly, said that the law will enhance financial discipline at the two tiers of government, as prescribed that all revenues  shall be lodged at the state’s consolidated revenue fund.