The Director-General, the Debt
Management Office, Dr. Abraham Nwankwo, has said the power projects for
which the country recently secured a $1bn Eurobond will be judiciously
monitored.
The $1bn Eurobond offering meant to finance power projects was four times oversubscribed due to high investor demand.
Nwankwo also said the states were free to borrow from the international capital markets provided they met the requirements.
He spoke on Thursday in Calabar, Cross
River State, at a one-day workshop for the South-South, South-East and
South-West geopolitical zones on effective sub-national debt management
for top policy makers.
According to Nwankwo, the projects to be
executed with the $1bn Eurobond will be monitored by the DMO, while
there will be a deliberate attempt to report findings periodically.
“All borrowed funds must be well
utilised. Even the $1bn Eurobond, the DMO will ensure that the projects
in the power sector are closely monitored. We are not only going to
ensure close monitoring, we will also make sure that the findings are
reported from time to time,” he said.
Nwankwo stated that the country was
currently operating a vibrant fiscal federalism with high level of
fiscal autonomy for the states of the federation.
“However, we need to ensure effective
coordination and sufficient congruence, vertically between the federal
and state governments, and horizontally among the states, in order to
maximise the synergy for growth, development and poverty reduction,” he
said.
On the requirements to borrow funds,
Nwankwo said the states must get an approval and guarantee from the
Federal Ministry of Finance and also fulfil the various conditions of
the Securities and Exchange Commission.
“States can borrow so far they get an
approval from the Federal Government. There are various levels of
control and supervision of external and internal borrowings. What
applies to listed companies that borrow from the capital market also
applies to state governments,” he said.
Nwankwo also said the states must meet the requirement of paying the loan at the agreed time.
He added that the objective of the
workshop was to ensure that the achievements recorded in sub-regional
debt management were internalised, consolidated, sustained and improved
upon.
Declaring the workshop open, Governor
Liyel Imoke, said as decision makers and managers of finances, the
participants drawn from all the states in the southern part of the
country should come up with sustainable strategies that would enhance
debt sustainability and management.
Imoke, who was represented by his
deputy, Mr. Efiok Cobham, said as a key instrument of sound public
finance management, the DMO had continued to play a pivotal role in debt
matters, not only to avoid the nation relapsing into debt, but also to
regulate debt matters.
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