It’s illegal for state govts to take foreign

It’s illegal for state govts to take foreign
loan without FG’s approval – DMO boss
on october 25, 2013 at 12:00 am in news
By SIMON EBEGBULEM
BENIN CITY—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.