From Uche Usim, Abuja
The Debt Management Office (DMO) has given reasons why States of the federation have continued to perform poorly in debt sustainability practices.
According to the Office, the first reason is their inability to prepare their Debt Sustainability Analysis (DSA) and Medium-Term Debt Strategy (MTDS).
The DMO noted that rather than focus on these two tools and approaches to support them in achieving the minimum requirements for the the debt-related Disbursement Linked Indicators (DLIs), the states’ adherence to the provisions of the Fiscal Responsibility Act on contracting their debts has remained a major concern.
DMO is one of the government’s implementing agencies providing Technical Assistance (TA) by utilizing a combination of tools and approaches to support the State Governments to achieve the minimum requirements for debt-related Disbursement Linked Indicators (DLIs).
Speaking in Abuja on the topic “Paths to sustainable debt management: The States Fiscal Transparency, Accountability, and Sustainability (SFTAS) Programme approach”, the Director General of the DMO, Patience Oniha, said the states’ performances have been poor since 2018 when the Annual state debt sustainability analysis and medium-term debt management strategy were introduced.
Oniha, who was represented by a senior official of the agency, Isyaka Mohammed, lamented the inability of the State implementing state-level debt legislation to meet the three stipulated DLI criteria for strengthening public debt management and fiscal responsibility framework, namely DLIs 7, 8 and 9
DLI 7 focused on strengthening public debt management and fiscal responsibility framework for the state governments, while DLI 8 was designed to improve the clearance/reduction of stock of domestic expenditure arrears of the state governments, and DLI 9 was meant to improve the debt sustainability of the various states.
In terms of States that produced quarterly state domestic debt reports (SDDR) approved by the DMO on average two months after the end of the quarter, the DMO said for 2018, only the fourth quarter was assessed following the roll out of the new quarterly report template.
For the period between 2019 and 2021, the DMO said all four quarters were assessed, with quarterly state debt reports for Q2, Q3 and Q4 of 2020 accepted on average two months or less after the end of the quarter in 2020 and Annual state debt sustainability analysis published by end of December 2020.