Federal Government Bars States From Bank Loans

The Federal Government of Nigeria has barred banks in the country from giving loans to state governments.
The decision was taken in line with the Fiscal Sustainability Plan, FSP, which has been agreed to by the Federal Government’s economic team and state governors, to ensure prudent management of sub-national resources.
Finance Ministry sources said,  the Government was disappointed at the manner some past and current governors took loans from banks and misapplied such funds, while mortgaging their states’ finances.
This comes as the Central Bank of Nigeria, CBN, will today announce details of the much anticipated ‘flexible’ foreign exchange rate policy.