|Debts won't bankrupt states, says DMO, Friday, 16 Mar 2012|
(The Nation) The Debt Management Office (DMO) has faulted suggestions by the Chairman of the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), Elias Mbam, that some states would soon go bankrupt as a result of their domestic debts overhang. Speaking while receiving computers from the Honeywell Group in Abuja, yesterday, the Director-General of DMO, Dr. Abraham Nwankwo, insisted that "no state in Nigeria will go bankrupt." He said economies are strong and they have enough resource bases that are deep and adequate. He cautioned that Nigerians "should not be simplistic or segmented," stressing that no state lacks the ability to produce three agricultural commodities to export levels. "He said everybody should explore and exploit the resources they have so that each state will be buoyant. He added that "every state has what it takes to survive economically and to be prosperous.
Nwankwo, implored Nigerians and all stakeholders to help states develop their debt management departments towards building enduring institutions. He revealed that 28 out of the 36 states have reached very matured stages of having their debts reconstructed, while 18 have their debt data already reconstructed. As a result of this development, Dr. Nwankwo said: By the end of 2012, all 36 states would have reached matured stages of debt reconstruction," adding that before the year runs out, the DMO plans to give the exact details of all states' public debts profile. He maintained that the states' public debts were healthy, but admitted that there are challenges determining the actual public/domestic debts of states. He said the DMO and the states' Debt Management Departments (DMD) have made some progress to computerise the exact amount of public debts owed by the states by building the capacity of the respective officials to compute their domestic debts for fiscal planning. The categories of domestic debts identified across states include: contractors' arrears; arrears on pensions and gratuities; arrears on salaries and other staff claims; commercial bank debts; state bonds; and other liabilities including judgment debts.
Dr Nwankwo, said data on debt sustainability of states are more accurate today than they were four or five years ago. Already, Nigeria has accurate external and domestic debt data for the federal government as well as for the external debts of states. He however, said both the DMO and state DMDs were in the process of doing same for the domestic debt profile of states. Nwankwo also admitted that "there are challenges, but states do not have to depend on government solely." One of the challenges confronting states in managing their domestic debts is the inability of states to provide data online to DMO for accurate computation of their domestic debt profile. Some states he said are not ready with their IT equipment but in order to support the states, DMO approached patriotic organisations with high corporate citizenship such as Honeywell group and Chams for computers, printers etc to help reconstruct the debt data of states to ensure fiscal prudence and responsibility across the country. Yesterday, Honeywell Group led its Head of Special projects and corporate communication, Ebunoluwa Bolodeoku donated 32 computers units and UPS to be made available to 10 states. The states are Ondo, Benue, Ekiti, Gombe, Yobe, Niger, Anambra, Edo, Abia and Enugu. Bolodeoku said, Honeywell was committed to supporting DMO achieve its strategic goals and government's transformation agenda.
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