The Debt Management Office said on Wednesday that it would announce the actual domestic debts of each of the 36 states of the federation by October after the reconstruction of states’ debt profile.

The Director-General of the Office, Dr Abraham Nwankwo, said this in an interview with the News Agency of Nigeria in Abuja.

“Possibly before the end of October, we would have actually rounded off with all the states with sub-national debt reconstruction and then do a lot of refinement and be able to announce to the public, the actual domestic debt of states as reconstructed.

“That will be a new level for Nigeria, in terms of not only do we know the external debt of everybody but we now know in a reliable manner , the domestic debt of the states,” he said.

Nwankwo added that the domestic debt included not just what they issued in the capital market or what they borrowed from banks but their supplier credit, including pensions, contractors, arrears, among others.

According to him, it will be a comprehensive picture of what the domestic debt profile is in each state of of the federation and the FCT.

He said that only two states had yet to undergo the reconstruction and training to enable them to establish their debt management office and commended the state governments for accepting the initiative.

He called on Nigerians to appreciate the “positive’’ moves being made to keep the economy on track.

“Nigerians should be looking at the positive development that is taking place; four years ago, nobody could confidently say this is how much a state owed domestically, what it borrowed from banks or capital markets, pension arrears and so on.

“And now, we are saying that we can confidently say how much 34 states, each of them is owning in all these aspects, banks, pension arrears and by the end of the year, we will have a full picture,’’ he said.

Nwankwo said that by the end of the year, Nigeria would have 36 debt managing institutions to ensure efficiency in the management of debts in the states.

Also, the DMO has said that the $7.9bn loan the Federal Government proposes to borrow from external sources will be for specific projects in the medium term.

Nwankwo said that the loan would not have any negative impact on the economy.

President Goodluck Jonathan had in February sought the approval of the National Assembly to borrow $7.9bn from the World Bank and the African Development Bank to fund some projects.

“When you talk about the $7.9bn that Mr President wants to borrow, this is for over the medium term; he is not borrowing for one year,’’ Nwankwo said.

“He is borrowing up to 2015 and it is for specific projects, in agriculture, water supply, education, health, power, things that will help generate the economy.

“We have to appreciate that this is a soft loan; we are talking of concessional loan, moratorium of 10 years, and repayment of 40 years, that means 50 years,’’ he said.

Nwankwo said that the burden of the loan would be spread over 50 years, adding that “it is as good as free money.”

He said that the external borrowing was not only for the Federal Government but for the 36 states and the Federal Capital Territory as well.

He said that water and sanitation projects in some 10 states would benefit from the loan.

“So when we talk about the external debt, it is the external debt of the Federal Republic of Nigeria not of the Federal Government,’’ he said.

Nwankwo said that all the foreign debt of the state governments was part of the $6bn external debt of the country.

Source: Punch