Banks must get Adeosun’s approval before lending to states – DMO

To reduce their exposure to huge indebtedness, the state governments can no longer borrow from the banks or the bond market without the express approval of the Minister of Finance acting on the advice of the Debt Management Office, investigation has shown.

Already, no state government can contract external loans without the approval of the Federal Government, which acts as a guarantor, and the National Assembly, which must give its nod to any external loan by any tier of government in the country.

The PUNCH had recently reported that the 36 states of the federation and the Federal Capital Territory raised the nation’s domestic debt by N1.64tn in the past three years.

The Director-General, DMO, Patience Oniha, confirmed this in a telephone interview with The PUNCH correspondent in Abuja.

The PUNCH, June 27, 2018

 

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