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Nigeria’s Debt Management Office (DMO) has issued a strong directive to state governments, emphasizing the critical need for responsible borrowing practices that strictly adhere to existing laws. The DMO Director-General, Patience Oniha, highlighted this imperative during a recent workshop focused on borrowing guidelines for state officials in Abuja.
This capacity-building initiative is part of the DMO’s ongoing efforts to enhance financial governance at the sub-national level. The program aims to equip state representatives with a comprehensive understanding of debt recording, sustainability analysis, medium-term debt management strategies, and the correct borrowing procedures. Such knowledge is deemed essential for sound financial decision-making.
Ms. Oniha underscored that the training specifically targets the legal framework governing state borrowings. This includes detailed instruction on compliance with the Fiscal Responsibility Act, the DMO Act, the Investment and Securities Act, and the Nigerian Constitution. Adherence to these regulations is non-negotiable for any borrowing activity undertaken by state governments.
The DMO noted that delays in processing borrowing requests have often stemmed from a lack of clarity regarding these legal requirements. By providing targeted training, the office seeks to streamline the process, ensuring that states can access necessary development funds without encountering avoidable bureaucratic hurdles.
Participants in the workshop, comprising five to eight officials from each state, were informed that there is no room for deviation when it comes to legislative mandates. The DMO’s stance is clear: compliance with the law is paramount, irrespective of the source of potential funding, including international development finance institutions like the World Bank.
Ultimately, the DMO’s initiative aims to foster a culture of fiscal prudence and legal compliance among state governments. This will enable them to leverage borrowing effectively for developmental projects while safeguarding the nation’s financial stability and ensuring sustainable economic growth across all regions.
