The Debt Management Office (DMO) has urged Nigerian states to borrow responsibly and ensure that loans are tied to clear development goals. The agency warned that unchecked borrowing could put pressure on state finances and limit the ability to fund essential services. According to the DMO, loans should only be taken when absolutely necessary and used wisely.

The DMO explained that borrowing itself is not a problem if funds are properly managed and invested in projects that can boost economic growth. It stressed that states must carefully study loan terms, repayment plans, and long-term impact before seeking new debts. This approach, the agency said, will help prevent financial distress in the future.

Officials also encouraged state governments to improve revenue generation rather than depend heavily on borrowing. By expanding internally generated revenue and cutting wasteful spending, states can reduce their reliance on loans. The DMO added that transparency and accountability in managing borrowed funds are very important.

The office reaffirmed its commitment to guiding states on sustainable debt practices. It said it will continue to work with state governments to ensure borrowing aligns with national debt strategies. The DMO believes responsible borrowing will support development without placing future generations under heavy debt burdens.