The Debt Management Office (DMO) has called on state governments to strengthen compliance with borrowing laws and adopt responsible debt practices, stressing that proper adherence to established fiscal frameworks is essential for sustainable development.
Patience Oniha, Director General, DMO, made the call on Tuesday during a workshop on borrowing guidelines for top policymakers under the World Bank-assisted States Action on Business Enabling Reforms (SABER) programme.
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Oniha explained that the workshop is part of ongoing capacity-building efforts targeting sub-national governments, including the 36 states and the Federal Capital Territory, to improve understanding of debt recording, sustainability analysis, and medium-term debt management strategies. “We have been doing capacity building for what we call the sub-national governments…all of that we put them through. It’s been a collaborative effort,” she said.
The training, Oniha noted, is designed to clarify the legal and procedural requirements for borrowing, ensuring states can raise funds efficiently for development projects. “Because our experience several years back was, each time a state wanted to borrow… it has to pass through the Honorable Minister of Finance and through the Debt Management Office. So we saw the process was taking time, because there wasn’t clarity or understanding, that’s why we initiated this workshop,” she added.
Oniha emphasised that borrowing must comply with Nigeria’s constitution, the Fiscal Responsibility Act, and the DMO Act, which collectively establish a transparent and accountable framework for public debt. She urged participants to share the knowledge gained from the workshop with colleagues in their respective offices to improve collaboration and compliance.
“How do we make the process work? How do we make the subnational governments understand the process of borrowing, so that they can raise the funds that they need for development?” she asked, highlighting the importance of preparation and adherence to regulations.
The DMO chief also noted that while the agency provides guidance, all borrowing activities—whether from domestic or international lenders—must follow legal protocols and receive necessary approvals. She stressed that proper compliance ensures transparency, effective monitoring, and timely debt servicing, thereby reducing the risk of fiscal mismanagement and unsustainable borrowing.
Oniha further encouraged active engagement during the workshop, noting that interaction among participants would help states adopt best practices and strengthen their capacity to manage public debt.
She underscored that the ultimate goal of the initiative is to ensure that funds raised are directed toward productive development projects, contributing to long-term fiscal stability across the country’s sub-national governments.