Finance Minister, Dr. Olusegun Aganga, has said in New York that the Federal Government would no longer permit state governors to enter into loan and debt obligations that would continue after their tenure.
Quoting a news portal, Empowered Newswire on Saturday, Aganga said the decision which took effect this year, was part of FG’s fiscal reform programme.
He also noted that the federal government had already saved about N12b from payrolls and salaries with the adoption of data capturing of personnel information.
Aganga spoke ahead of a gala night held in his honour by Techno-Serve, an international not-for-profit organisation that seeks to cut poverty in the world.
He said that one of the major pillars of Nigeria’s renewed economic growth was to ensure fiscal reforms and discipline by maximising, diversifying and protecting the revenues of the Federal Government.
While conceding some level of wasteful spending by the government in the past, the former Goldman Sachs executive said, “If any state wants to borrow externally, the state will ask me…if I agree we ‘ll take it to the National Assembly for approval, but if that state cannot sustain the repayment of the loan, I will say no.”
He added that state houses of assembly should also write to authorise the loan before he can look at it.
Asked what will happen to states where the previous governors had already committed the government, Aganga said, “they will come to us to restructure the loans to make it affordable. The FG knows most if not all the loans owed by states and there are adequate controls.”
According to him, whether it is external borrowing from the global community, or domestic borrowing by way of local bonds, or even commercial loans, the states can hardly enter into any loans without the knowledge of the federal government. Besides, he said there is a team in the Finance Ministry that will also monitor the projects for which such loans have been obtained.