The on-going National Constitution Convention has retained an article in the First Draft Constitution on the borrowing and lending by government to permit it to borrow money from any source but subject to parliament authorization.
Clause (1) of Article 282 provides that Government may borrow money from any source and further in clause (2) of the same article explains that government shall not borrow, guarantee or raise a loan on behalf of itself or any state organ, state institution, authority or person except as authorized by or under an Act of Parliament.
But clause (3) has categorically explained that notwithstanding clause (2) the government shall lay before the National Assembly the terms and conditions of the loan which shall not come into operation unless approved by a simple majority vote of National Assembly and pay any money received in respect of the loan paid into the consolidated Fund or into some other public fund which exists or is created for the purpose of the loan.
In this case Government will be required to lay before the National Assembly terms and conditions that includes the source of the loan, the extent of the total indebtedness by the way of principal and accumulated interests, the provisions made for servicing or repaying of the loan and the utilization and performance of the loan.
Meanwhile, the house has adopted Article 279 (1) to provide that the president shall subject to clause (2) cause to be prepared and laid before the National Assembly in each financial year, not later than ninety days before the commencement of the financial year, estimates of revenues and expenditure of the government for the next financial year.
And clause (2) of the same article has been adopted which provides that the Minister shall, when presenting the estimates of revenue and expenditure under clause (1) specify the maximum limits that the government intends to borrow or lend in that financial year.
While clause (3) states that in any year where a general election takes place, the president shall cause to be prepared and laid before the National Assembly, within ninety days of the swearing in of the president, estimates of revenues and expenditure of the government for next financial year.
The group justified that the clause would ensure that the government-elect could implement their plans and policies in the following year.
The Draft Constitution has further mandated Parliament in article 280, to enact legislation relating to the annual budget and estimates of expenditure including the method for the preparation of the budget, the preparation of medium and long term development plans indicating corresponding sources of financing.
The house adopted the recommendations by the thematic group on Public Finance that the article be adopted without amendment after it was explained that the amendments would be provided for in an Act of Parliament.
But the house agreed that the marginal note on article 280 be amended by introducing the words ‘planning and ‘ , so that it could read as planning and budget legislation after amendment.