The Debt Management Office (DMO) has called on Nigerian state governments to adopt more responsible borrowing practices and ensure efficient use of loans in order to sustain long-term economic growth.
DMO Director-General, Patience Oniha, delivered the charge at a World Bank-supported workshop on “Borrowing Guidelines for Top Policy Makers” held in Lagos on Tuesday.
She explained that Nigeria operates a single economy where fiscal actions at the state level directly impact the federal balance sheet. Oniha emphasized the need for states to strictly follow existing borrowing laws and prioritize productive investments.
“Borrowed funds must be put to good use. Debt should be managed in a sustainable manner to avoid the mistakes of the past. Nigeria has experienced debt crises before, and everything must be done to prevent another,” Oniha cautioned.
The DMO boss urged states to diversify their financing models by exploring Public-Private Partnerships (PPPs) for infrastructure development. According to her, PPPs attract private capital and technical expertise, reducing the government’s financial burden while creating jobs and delivering better-quality services.
She also stressed the importance of improving tax administration to enhance fiscal revenues. “Efficient tax collection boosts government resources without raising rates. It reduces leakages, combats corruption, and ensures more funds are available for investment in health, education, and infrastructure,” she added.
Speaking at the event, Lagos State Commissioner for Finance, Abayomi Oluyomi, echoed the call for prudent borrowing. He said responsible debt management is essential to meet the social contract between governments and citizens.
Oluyomi noted that while Lagos is committed to sustainable fiscal policies, exchange rate volatility has significantly raised its debt service costs. The workshop was aimed at equipping policymakers with legal frameworks and best practices for effective debt governance.
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