•Loan requests by some states turned down
Everest Amaefule, Abuja
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.
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…
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