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 N1.64 trillion in the past three years.
Following the conversion of loans owed by most state governments into bonds, the Federal Government now insists that no bank should lend to the state governments without clearance from it.
DMO Director-General, Patience Oniha, confirmed this in a telephone interview with our correspondent in Abuja.
"Some banks lent to some states without the approval of the Minister of Finance. We could have simply told the banks to go and write off the debts, because they did..."
Read the full story here:
https://lnkd.in/ehu36Sh
No comments:
Post a Comment