Federal Government has said that states are discouraged from borrowing because the debt profile of some states is very high and they do not have enough revenue to service their debt.
Minister of State for Finance, Bashir Yuguda, while delivering a lecture titled: ‘Nigeria’s Economic Policies and Reforms’ at the National Defence College, Abuja said “The domestic debt profile of some states is scary. They are so much in debt that only a small amount of their allocations get to them at the end of the day. This is because most times, money for debt servicing is removed from source.
“This is the reason why we discourage them from borrowing. Even if they will, it has to be on prioritised projects with high returns. Prioritisation is key in this difficult time.”
Yuguda said the government is putting plans in place to diversify the economy to other sectors that will improve the nation’s growth and also create jobs.
The minister noted that Nigeria is self-funded, he said “Nigeria is not a donor-dependent country. Most businesses do not receive support from international agencies. Nigeria is one of the few developing countries that do not rely on donor agencies to fund its budget; we are self-sufficient.”