The inability of states to prepare their Debt Sustainability Analysis (DSA) and Medium-Term Debt Strategy (MTDS) has been attributed to their continued poor performance in debt sustainability practices.
The Director General of DMO, Patience Oniha, stated this while speaking in Abuja on the topic “Paths to sustainable debt management: The States Fiscal Transparency, Accountability, and Sustainability (SFTAS) Programme approach.”
Oniha who was represented by a senior official of the agency, Isyaka Mohammed, noted that rather than focus on these two tools and approaches to support them in achieving the minimum requirements for 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.
She lamented that the states’ performances have been poor since 2018 when the annual state debt sustainability analysis and medium-term debt management strategy were introduced.
She further stated that 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 was affecting them.
DLI 7 focuses 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 is 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.