States Should No Longer Rely On Federal Allocation – DMO
It is now going to be tougher for state governments to enjoy easy access to borrowed funds.
The Debt Management Office, DMO says it will no longer allow states to borrow simply because they are expecting federal allocations.
The Director-General, DMO, Patience Oniha, said this when the Edo State Governor, Godwin Obaseki, visited her in Abuja.
Oniha said with dwindling allocations going to the states from the Federation Accounts on monthly basis, it is no longer reasonable for the states to borrow and ask that refunds be deducted at source.
The DMO boss said states should become proactive and innovative in sourcing for funds.
It also does not help matters that most government revenue still comes from crude sales.
“Previously, we could rely on funds from the Federation Accounts Allocation Committee; and in addition to that, we could borrow both at the federal and at the state levels, because there wasn’t a challenge.
“I think the times have changed. Revenues are under severe pressures. We are still dependent on oil revenues; non-oil revenues are picking up but that is still a journey,” the DMO boss said.
This, she said, means that, “Both now and in the future, we need to do things so much differently. We must be more strategic in the management of public finance. It’s no longer business as usual.”
“We can’t collect money from FAAC, borrow, continue and wait until the next month. So, at various levels, we need to be more strategic and more creative in the things that we do,” she added.