The Nigerian Federal Government has barred commercial banks in the country from giving loans to state governments . . .
Reports indicate that this in line with the Fiscal Sustainability Plan (FSP) which was agreed to by the Federal Government’s economic team and state governors, to ensure prudent management of sub-national resources.
The Central Bank of Nigeria (CBN) is expected to announce details of the so-called ‘flexible’ foreign exchange (FOREX) rate policy. President Muhammadu Buhari’s administration, Finance Ministry sources said, was disappointed at the manner some past and current governors took loans from banks and misapplied such funds, while mortgaging their states’ finances.
The Federal Government asked states to source funds from the capital market for their infrastructure development. It also insisted that funds sourced through bonds must not only be on bankable, measurable projects but must also be released in tranches.