DMO seeks effective debt management practices for sustainable economic

The Debt Management Office (DMO) has called on sub-national governments across Nigeria to adopt robust debt management strategies to safeguard economic stability and drive sustainable development.

Director-General of the DMO, Patience Oniha, delivered the message on Tuesday during a World Bank-assisted workshop on “Borrowing Guidelines for Top Policy Makers” held in Lagos.

Oniha explained that the workshop was organised to remind states that Nigeria functions as a single economy, where the fiscal decisions of one tier of government affect the other. She stressed the importance of judicious utilisation of borrowed funds and adherence to established borrowing laws.

“The other part of the story is using the money well and ensuring you can manage your debt in a sustainable manner. The reason why we want to work with the sub-nationals on how to borrow is because borrowing is not limited to the Federal Government. There are various laws on borrowing and these must be complied with,” she said.

The DMO chief advised state governments to take deliberate steps to avoid debt distress, recalling that Nigeria has previously faced severe debt crises. “Everything necessary must be done to avoid a repeat,” she cautioned.

Oniha also urged state administrations to explore Public-Private Partnership (PPP) models for infrastructure development, emphasising that private investment could ease the burden on public finances while improving service delivery.

“PPPs can help improve Nigeria’s economy by attracting private sector investment and expertise to develop infrastructure and deliver public services. This reduces the financial burden on government, accelerates project delivery, and often results in higher quality outcomes. PPPs can also create jobs, stimulate local businesses, and foster innovation,” she stated.

She further underscored the need for enhanced tax revenue mobilisation, which she said would strengthen fiscal health and reduce reliance on borrowing.

“Efficient tax collection increases government revenue without raising tax rates, ensuring that more funds are available for public investment in health, education, and infrastructure. Improved compliance and administration reduce leakages and corruption, making the tax system fairer and more predictable. Together, PPPs and efficient tax collection boost economic growth, enhance public services, and support sustainable development,” Oniha explained.

She stressed that raising revenue was essential for fiscal sustainability: “Revenues are absolutely important. It is important to keep surviving. You must raise revenues. Those borrowings must generate something that produces these revenues.”

Speaking at the event, Lagos State Commissioner for Finance, Abayomi Oluyomi, echoed the need for responsible borrowing by sub-national entities.

“Governments are put in place to cater for the needs of society, and fiscal and monetary policies should be aimed at creating comfort for the people. Government is about the welfare and security of the people. There is a social contract between the government and the people. To achieve this, revenue is never enough. Borrowing is a cornerstone of sustainable development and economic resilience. Well-researched debt management policies are the foundation for borrowing,” Oluyomi said.

He added that the Lagos State Government remained committed to responsible debt practices but acknowledged that the volatility of the naira had sharply increased the state’s debt obligations.