With states in the country having 3.94 billion in foreign debts as at June 30, 2017, the Chief Executive Officer of Budgit Mr. Seun Onigbinde, has urged states in the country to desist from acquiring more foreign debt.
He said the burden of paying back in foreign currency will impact the states.
Onigbinde also called for a review of the constitution to allow for transparency on the parts of state governments to make public the details of their budget and the implementation thereof.
Speaking at the maiden edition of the Meet The Executive organised by the Finance Correspondents Association of Nigeria (FICAN) in Lagos on Tuesday, he said that would enable citizens to hold the government accountable.
Budgit had recently challenged the Laos State government for not making available its budget for 2017, however, Onigbinde said the state governments were not bound by law to make public their spending books.
“There is no law that says the state government has to give out its budget. So, what we need is continuous advocacy. At the next constitutional review, we should put forward the issue of transparency, and why state government should publish their budgets. We need to build up a moral issue around it.
“This is public money and as the state governor it is not that you have money for nuclear weapons and you are not giving money for military strategy, so there is no reason why the budget should also not be published. It is public money; the accountability and performance should also be made public.”
On foreign debts of states, he said states did not have the luxury of earning foreign exchange to pay off their foreign borrowings and they remained at the mercy of the changing exchange rates.
Citing the Lagos- Badagry Expressway project as an example, Onigbinde said “when you assume something was packaged by private people and World Bank was involved, you would assume that standard ethics would have followed. Somehow, Lagos State has not done well especially with the 8 years of Fashola that loan was not optimised.”
“And unfortunately, the currency has moved against Lagos State government because you borrowed in dollars at N167 now you are paying back in almost N400. If you track Lagos State FAC, allocation has dwindled to almost N400 million because the external debts are being taken from source and it grows much larger as they go on. That is why we are warning states to be careful of external debts,” he further added.