Director-general, Debt Management Office (DMO), Patience Oniha, says about two states in the federation have exceeded borrowing limit.
Oniha made the disclosure at a day sensitisation workshop on Sub-National Debt Management for top policy makers in the South-East, South-South and South-West geopolitical zones on Wednesday in Benin City.
The DMO boss, who did not mention the two states, said the borrowing limit was below or within 40 percent of the net revenue after the computation of the monthly allocation to the states for a period of between six and one year.
“For domestic borrowing by states and their agencies, their debt service should not exceed 40 percent of actual monthly revenue, while for capital market borrowing, total loans outstanding at any time shall not exceed 50 percent of actual revenue for preceding 12 months.
“So far, from the figures we have, with the exception of about one or two states, others are all below 40 percent. Edo State is not one of the states that have exceeded or above 40 percent. The state still has a window of borrowing,” she said.
While expressing worry of the total debt stock of sub-national of N4,776,14 billion by the month of June 2018 as against N2,256,23 billion as of December 2014, representing an increase of about 111 percent, she called for urgent upscale of debt management capacities at the sub-nationals by states and the Federal Capital Territory (FCT).
According to Oniha, with the growth in the debt profile of state governments and the FCT, there is an urgent need to upscale debt management capacities at the sub-national level.
She said the implementation and operationalisation of the relevant laws in the states would ensure sustainability of state’s debt portfolio and enhance efficient debt management.
The agency is partnering the 36 states including the FCT for the purpose of enhancing debt management policies and practice at the sub-national level, she said.
She listed the objectives of DMO to include building effective debt management institutions and facilitate and the enactment of appropriate legislations on public debt management.
She, however, solicited the support of top policy makers in the states and the FCT to enact laws and policies for the sustainability of public debts in the country.
Earlier, Secretary to Enugu State government, Gabriel Aja, called on the federal and state governments to do everything within their power to reduce the debts profile of the country.
Also, in his remark, Imo State governor, Rocha Okorocha, represented by Amadin Anthony, commissioner for wealth creation and employment, urged state governments to borrow within the stipulated limit amount they could comfortably repay.
