PATIENCE Oniha, new director-general of the Debt Management Office, DMO, has said that the federal government has stopped state governments in Nigeria from borrowing from either foreign or local credit windows.

Oniha stated this on Thursday, August 3, in Abuja, when Godwin Obaseki, Edo State Governor, visited to congratulate her on her recent appointment as the new director general of the DMO.

Oniha said the decision was taken because there was no longer huge allocation to states at the end of monthly Federation Accounts Allocation Committee, FAAC, meetings “from where borrowed funds could be deducted, hence continuous exposure to new lines of borrowings may no longer be sustainable.”

Expressing regret that it was unfortunate that oil has continued to be the dominant contributor to the Federation Account, she advised state governments to “deploy new strategic thinking on how 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 levels because there wasn’t 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,” she said.

This, according to her, “means  now, and in future, is that 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 it’s no longer business as usual. We can’t collect money from FAAC, borrow, continue and wait until the next month. So at various levels, we need to be more strategic and more creative in the things that we do.”

She said the federal government has “initiated several measures to increase non-oil revenue and control cost, adding that “the law recognizes the States for being responsible for fiscal laws relating to them, but we decided to partner with them in the belief that Nigeria is one project, hence we should not be looking at the center, we should be looking at the various tiers of governments.”

As a result of the federal government’s big brother role, Oniha said the “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.”

Aug 14, 2017 @ 01:00 GMT