First of all, note that the 1999 Constitution of the Federal Republic of Nigeria (as amended) does not make specific provision for debt management. Section 314 CFRN that merely mentions debt, is of no moment to our dissertation. But the Constitution gives the National Assembly ‘exclusive’ power to make laws for the borrowing of moneys within and outside Nigeria for the purposes of the Federation or for any state and public debt of the Federation. Also it has powers over external affairs.[1] This implies that, it is only the National Assembly that can make law(s) for the debt regulation and management in Nigeria.[2] This to me makes absolute sense because debt, whether federal or state procured, directly impacts on the economy and Nigeria has one economy not 36 economies. Secondly, in a country that relies to a large extent on one commodity for most of its foreign exchange earnings, it is necessary that the power to make law for debt management in the country. So, it is the National Assembly that legislates on debt management. Recently, I heard that the DMO has been going to various states campaigning that they all pass debt management laws as the FG has done. While that is laudable as a strategy to raise awareness for the need for states to set up effective legal structures for debt management, it does not make constitutional sense. Simply because, debt legislation is within the legislative realm of the Federal Government not states. The legal implication of all this is that both the Debt Management Office (Establishment) Act 2003 and the Fiscal Responsibility Act 2007 applies to all the states even if some may have gone ahead to pass either public debt management or fiscal responsibility laws in their states.[3] So far eighteen states have passed these laws, while the others are in various stages of passing them.[4]
However, this argument is not as straight forward as we have put it above. A thorough reading of the Concurrent Legislative List[5] does show some perceived measure of inconsistency in this regard. Item 2 of the Concurrent List empowers the House of Assembly of a state to make laws for grants or loans from and the imposition of charges upon any of the public funds of that State or the imposition of charges upon the revenue and assets of that State for any purpose notwithstanding that it relates to a matter with respect to which the National Assembly is empowered to make laws. Item 1b contains a similar provision but this time with respect to the National Assembly. Now, we must acknowledge that bonds (whether sovereign or domestic bonds) are usually charged on the allocation or account of the issuing authority. So where it is a state that is the issuing authority for example, the repayment is charged to the allocations accruable to the state. That is why the issuing state must forward an Irrevocable Standing Payment Order (ISPO) before the issuance of the bonds is permitted by the regulatory authorities. The domestic debts of states are more often than not acquired by issued bonds. Bonds aside, various State Governments in Nigeria are also inclined to take foreign loans as well as the FG. This brings to mind the proverbial saying, ‘like father like son’. We have seen where State Governments go out on their own to secure loans from international bodies and countries through what is sometimes called assistance program. Does this now mean that by the provision of Item 2 of the Concurrent List, a state government has powers to make laws for the regulation and management of bonds and other loans in their states? We’re inclined to think so. Because Item 2 refers to “imposition of charges upon the revenue and assets of a state for any purpose”. But if we look at the Item 7 of the Exclusive List, the reverse would be the case. We will not belabour the argument further but we still think that borrowing monies within and outside Nigeria is a matter exclusively preserved for the National Assembly. Based on preponderate provisions in the Exclusive and Concurrent Legislative List in favour of the National Assembly. Assuming but not conceding that the power is concurrent, the constitutional doctrine of covering the field would apply to incline the power towards the National Assembly.

 


This post is a part of a full article I am currently working on.
[1] Items 7, 26 and 50 of the Exclusive Legislative List, Part 1, Second Schedule to the Constitution.
[2] By the following authorities, all matters in the Exclusive Legislative List are the exclusive preserve of the National Assembly. They are Section 4(2) & (3) of the CFRN (as amended), and Attorney General of Abia State & 35 Ors v. Attorney General of the Federation (2003) 19 WRN 1.
[3]Also the Doctrine of Covering the Field may now apply to either save or ostracised those pieces of legislations. That constitutional doctrine is to the effect that where the National Assembly has made a law on an area with the intention that the law covers the whole area, if a state assembly makes a similar law that is inconsistent with that of the National Assembly, such state law is null and void to the extent of its inconsistency.
[4]See Debt Management Office (Nigeria) Strategic Plan 2013-2017. Available at dmo.gov.ng
    Although the DMO says these laws are just meant to give legal backing to the operations of its departments in the start
[5]The list that contains the concurrent powers of the federal and state legislatures.

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