The Director-General of Nigeria’s Debt Management Office, Ms. Patience Oniha, has called on state governments to adopt Public-Private Partnerships and prioritise tax revenue generation over borrowing to fund infrastructure projects.

She made these remarks during a one-day workshop in Lagos on Tuesday, organised under the States Action on Business Enabling Reforms Programme with World Bank support.

Oniha emphasised that PPPs can drive Nigeria’s economic growth by leveraging private sector investment and expertise for infrastructure development and public service delivery.

This approach, she noted, reduces fiscal strain on governments, ensures faster project completion, and delivers higher-quality outcomes while creating jobs and spurring innovation.

Recall PUNCH Online on June 28, reports that Nigeria’s total public debt rose to N149.39tn as of March 31, 2025, marking a year-on-year increase of N27.72tn or 22.8 per cent compared to the N121.67tn recorded in the corresponding period of 2024. The figure, which was released by the Debt Management Office on June 26, also reflects a quarter-on-quarter increase of N4.72tn or 3.3 per cent from N144.67tn as at December 31, 2024.

Oniha said, “Borrowing should not be the major way to source funds. You must increase your revenues by increasing your tax revenues.

“Public-private partnerships (PPPs) can help improve Nigeria’s economy by attracting private sector investment and expertise to develop infrastructure and deliver public services.

“This reduces the financial burden on government, accelerates project delivery, and often results in higher quality outcomes. PPPs can also create jobs, stimulate local businesses, and foster innovation.”

Emphasising how critical tax revenue was to the state governments, the DG said it would boost their fiscal health, thereby reducing pressure on them.

According to her, “Efficient tax collection increases government revenue without raising tax rates, ensuring more funds are available for public investment in health, education, and infrastructure.

“Improved compliance and administration reduce leakages and corruption, making the tax system fairer and more predictable. Together, PPPs and efficient tax collection boost economic growth, enhance public services, and support sustainable development.

“So revenues are absolutely important. It is important to keep surviving. You must raise revenues. Those borrowings must generate something that generates these revenues. Who says the government must finance all the bridges and all the roads? That’s an area we have not explored. And we have financial institutions, local and foreign, that will be willing to support such initiatives.

“We are very creative. We need a road across this. Road across this, so if we focus on PPP and choose the right parties to work with, not only will we get quality, but there will be a timely delivery, and the loans will service themselves, and the government may not have to put in cash.

“Land can be its own equity. Equity doesn’t have to be in cash. So I think we are not looking very closely at PPP. So you see projects loaded in the federal budget, projects loaded in the state government budgets. Let’s begin to focus on that. That’s the way forward. We have made some progress with revenues, but we need to do a lot more.”

Prudent utilisation of borrowed funds

The D G urged state governments to ensure the prudent utilisation of the monies borrowed from creditors, as well as the sustainability of their debts.

She added that the federal government had to work with the states or sub-nationals as to how to borrow, as the nation has one economy, a single Gross Domestic Product, and is rated as one by ratings agencies as well as creditors.

Avoiding debt distress

The DMO noted that Nigeria had gone through a debt crisis in the past and that everything necessary must be done to avoid a repeat.

She said, “This nation has gone through a debt crisis before. I am sure you are all aware. Today, we can talk about Ghana. We can talk about Argentina. We can talk about Zambia and even Sri Lanka.

“But we have been in that situation before. So being part of that situation before which we exited in 2005 under that big debt relief programme that we had, Nigeria as a government, and I commend the leaders we had at that time, put together several laws to govern borrowing to ensure that we don’t get back to those situations or we don’t get into the situations that we’re seeing happening with other countries.”

Ms. Oniha said that the workshop became necessary to acquaint fiscal policy makers at the state level with extant laws and regulatory borrowing requirements.

Lagos to securitise assets

Earlier in his address, the Commissioner of Finance of Lagos State, Mr. Abayomi Oluyomi, disclosed that his state was working on the securitisation of some of its assets.

He did not identify the assets but explained that they would include both liquid and non-depreciable ones.

Mr. Oluyomi, who lamented that the Naira depreciation by the current administration was responsible for a huge jump in the state’s debt stock, especially the external segment.

He noted that from about $1/N400 before the present administration, the exchange rate jumped to over $1/N1,600, resulting in a huge debt stock for Lagos State without taking any new foreign loan.

The Commissioner said, consequently, Lagos State Government had taken a decision not to take any other foreign loan except concessional loans with a repayment period of more than 20 years. (The PUNCH)