DMO tightens access to loans by states

The Debt Management Office ((DMO) has told state governments that the era of unbridled access to foreign and local loans was over.

Director General of the agency, Patience Oniha advice them to henceforth imbibe frugality and fashion out strategic ways of fiscal plans and implementation.

Oniha spoke during a discussion with Edo State Governor, Mr. Godwin Obaseki who paid her a  congratulatory visit over her recent appointment said this became imperative because allocation has much dwindled from  federation accounts from where such loans could be deducted.

While expressing concern that oil resources have continued to be the dominant contributor to the Federation Account, the chief debt manager advised states to deploy innovative ways to address the financing of their already bloated debt stocks as well as how to generate funds to execute their plans aside from borrowings.

“Previously, we could rely on funds from FAAC and in addition to that we could borrow both at the Federal and at the State level  because there wasnt a challenge.

“But I think the times have changed. Revenues are under severe pressures, we are still dependent on oil revenues , non oil revenues are picking up, but that is still a journey

“So it means  now, and in future, we need to do things so much differently, we must be more  strategic in the management of public finance so the language I always use in my previous work where I was at the Efficiency Unit is that its no longer business as usual.

“We cant collect money from FAAC , borrow, continue and wait until the next month.

“So at various level, we need to be more strategic. And more creative in  the things that we do . so why we at the Federal level  have initiated several measures  to increase non- oil revenue , control cost, Iam aware that States like  Edo State have embark on  a number of initiatives, that is commendable,’’ she added

“She said the law recognizes  the States  for being responsible for fiscal laws relating to the States, but we decided to partner with them in the belief that Nigeria is one project , hence we should not be looking at the centre , we should be looking the various tiers of `governments.

“So what we did in that regards was to work with the various tiers of the states to have enabling laws , create their own debt managements  and then help them work with them through training and other activities to create their own domestic debt data you know at the centre we have the figures of the external.

“I am actually pleased to say that that aspects of the DMO work has been successful.

“I think where we are presently, where we have major challenges ,  At the DMO , we have done a lot with the states in terms of assisting in developing their debt data , passing debt laws leading to the establishment of Debt bureaux and so on.

“As we speak, we have a good understanding of the debt portfolios at the sub- national and am happy that Edo State is one of the States that is compliant in its debt data reporting.