DMO Issues Fresh Warning to State Governments Over Borrowing Rules

• The Debt Management Office has urged state governments to comply with borrowing laws strictly, as they prepare for the next fiscal year
• The DMO Director-General, Patience Oniha, gave the advice in a workshop focused on borrowing procedures, debt sustainability, and legal requirements
• The DG said poor understanding of guidelines often delays loan approvals for states, stressing that compliance with borrowing rules is mandatory for states seeking loans

Oluwatobi Odeyinka is a business editor at Legit.ng, covering energy, the money market, technology and macroeconomic trends in Nigeria.

The Debt Management Office (DMO) has advised state governments to strictly follow existing laws and guidelines when seeking loans to avoid delays and ensure responsible borrowing.

According to the Director-General of the DMO, Ms Patience Oniha, compliance with the Fiscal Responsibility Act and other relevant legislation is mandatory for all borrowing activities at the sub-national level.

She gave the advice during a workshop on borrowing guidelines for state government officials held in Abuja.

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DMO’s workshop for subnational govts to boost capacity

Oniha explained that the workshop forms part of the DMO’s ongoing capacity-building programme designed to strengthen states’ understanding of debt management.

She said the training covers key areas such as debt recording, debt sustainability analysis, medium-term debt management strategy and approved borrowing procedures.

She noted that the programme is intended to help states understand and comply with legal requirements outlined in the Fiscal Responsibility Act, the DMO Act, the Investment and Securities Act and the Constitution of the Federal Republic of Nigeria.

The DMO boss recalled that in the past, many borrowing requests from state governments experienced delays due to a poor understanding of established guidelines.

She explained that all loan requests must pass through the Minister of Finance and the DMO, as required by law.

Oniha said the workshop was introduced to address these challenges and was expanded this year to allow broader participation, with each state represented by between five and eight officials.

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She stressed that compliance with borrowing laws is not optional, adding that a proper understanding of the process would enable states to access funds for development projects without unnecessary delays, including loans from development finance institutions such as the World Bank.

“There is no flexibility when it comes to the law. If it is in the law, you must comply,” she added.

Nigeria's public debt hit record N152.4

Legit.ng earlier reported that Nigeria’s public debt has hit an unprecedented N152.4 trillion as of June 30, 2025, under President Bola Tinubu.

The country’s debt profile ballooned by N3 trillion in just three months, showing Nigeria’s dependence on external borrowing.

According to data from the Debt Management Office (DMO), the World Bank remained Nigeria’s top lender in the review period.

States' debt per person surges

Legit.ng reported that about 12 Nigerian states now rank among those with the highest debt per person as Nigeria’s debt profile rises.

Data by BudgeIT, the social accountability platform, shows that two Nigerian states have about N100,000 debt per capita.

This development comes as Nigeria’s total debt profile has risen to N152.4 trillion, driven by increased external borrowing.

Source: Legit.ng