Thisday Newspaper
From Onwuka Nzeshi in Abuja,

Stakeholders in various sectors of the Nigerian economy yesterday expressed concern over the growing external borrowing and worsening debt profile  of the country. They warned that Nigeria may soon relapse to its pre-2005 status when it was heavily indebted to the London and Paris Club of creditors.

The warning came at  the public hearing on a bill for an Act to repeal the Debt Management Office  (Establishment) Act No. 18 of 2003 and to re-enact the Debt Management Office (Establishment) Act 2008, to establish the Debt management office and related matters, 2009.

Chairman, Fiscal Responsibility Commission (FRC), Alhaji Aliyu Yelwa; Director General of Debt Management Office (DMO), Mr Abraham Nwankwo; Accountant General of the Federation (AGF), Ibrahim Dankwambo, as well as Minister of Finance, Dr.  Mansur Muhtar, were among the experts who were at the hearing to consider the bill.

Speaker of the House of Representatives, Hon. Dimeji Bankole,  while declaring the event open said despite the impact of the global economic meltown on the country, state actor must exercise caution in obtaining foreign loans  to halt  the increasing  debt portfolio of the country.
Chairman,  Fiscal Responsibility Commission (FRC), Aliyu Yelwa, explained that the proposed bill was aimed at ensuring transparency in the system just as he stressed the need for monitoring and enforcement of relevant laws on debt management.

Yelwa explained that the proposed bill was aimed at ensuring transparency in the system just as he stressed the need for monitoring and enforcement of relevant laws on debt management. According to him, uncoordinated laws on  funds and outright loans was  undesirable for sustainable development.

“The law should be strengthened  on how to obtain loans and that law is meant to ensure sustainable development of the Nigerian economy. I will tell you the truth, so far I’m not impressed, if we borrow for the sake of budget balancing, we are doing nothing. Our laws say you can borrow strictly for projects, even if you die, something is there. There is a temptation if the loan is really cheap, the repayment is lengthy, so there is always the temptation to borrow but the question is when you borrow, what do you do with the money? We need to canvass properly on all our Governors, to borrow for something tangible not for just salaries, but something you that will outlive you,”he said.

Nwankwo who expressed support for ongoing efforts to repeal the DMO Act 2003 aimed at strengthening the Office, noted that such move will further consolidate on the efforts of the Federal Government to ensure sustainable development of the country.
He said that the  DMO in collaboration with other stakeholders was out  to ensure that state governments across Nigeria were encouraged to have the capacity and  institutions that will enable them  only borrow when absolutely necessary  and use the proceeds of the borrowed fund very effectively and efficiently.

He explained that Fiscal Responsibility Act which was passed last year by the National Assembly has already taken care of relevant sanctions for defaulting states, organisations, government establishments or individual(s) in order to ensure effective utilisation of borrowed funds and compliance with extant laws.