THE Director General of the Debt Management Office, DMO, Dr Abraham Nwankwo, yesterday, in Benin City, declared that it was illegal, unconstitutional for any state government to borrow funds externally without approval of the Federal Government.
He urged state governments to key into transformation agenda of the Federal Government by focusing on other areas to generate funds outside oil to help in the rapid growth of the economy.
Dr Nwankwo spoke at a three-day retreat organised by the DMO for the Senate Committee on Local and Foreign Debts, led by its chairman, Senator Ehigie Uzamere.
He said: “ The constitution of the Federal Republic of Nigeria states that no state government or agency can borrow externally without approval of the Federal Government, no state has the capacity constitutionally to borrow unless through the Federal government.
“Any state that is interested in borrowing will package their proposal which is sent to the Minister of Finance, then the Minister will refer to DMO and we now process that request after our investigations. If what you are borrowing from is not a priority for the country it will not be granted. And what it means is that the Federal Government must be interested in what is happening in the states because the money has to be serviced as at when due.
“We are responsible to make sure that states borrow from the right sources and that whatever they borrow is repaid as at when due.”
He stressed that states should help grow the economy and transform education, agriculture, and focus on other areas outside oil.
“They have the capacity to grow agriculture or build industries to create employment just like the Federal Government,”he said.
let all of us focus on how to support each other so that we can grow. The key to the development of Nigeria lies with the 36 states and the FCT because if states transform themselves in education, health, and agriculture then Nigeria is transformed.”
He added that the DMO had helpedto the grow the nation’s economy through borrowing of funds that assisted government to fund the budgets, asserting that contrary to insinuations, the nation’s debt profile was sustainable.
In his opening remarks, Senator Uzamere, expressed optimism that the Retreat would afford the committee the opportunity to understand the debt profile of the nation during its oversight functions.
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