BORROWINGS BY PUBLIC BODIES ACT
Act · Governance
An Act regulates borrowings by public bodies in Nigeria by requiring government approval for loans. It targets federal and state government entities to control public debt accumulation. This protects the country's fiscal position from uncontrolled borrowing.
BORROWINGS BY PUBLIC BODIES ACT
What Is This Policy?
An Act regulating the borrowing of money by public bodies in Nigeria, requiring government approval before any public body may raise loans from domestic or external sources.
Who Does It Target?
Federal and state government bodies and parastatals Statutory corporations and government-owned companies The Debt Management Office (DMO) The Federal Ministry of Finance and state finance commissioners
What Does It Aim to Achieve?
Prevent uncontrolled public sector borrowing, ensure all government and parastatal loans are approved at the appropriate level, and protect Nigeria's fiscal position by controlling the accumulation of public debt.
Key Features
Approval Requirement: No public body may borrow money without prior approval of the relevant authority — Federal Government for federal bodies, State Government for state bodies. External Borrowing: External loans by any public body require Federal Government approval regardless of which tier of government is involved. Terms Disclosure: Borrowing proposals must be submitted with full terms including interest rate, maturity, and use of proceeds. DMO Coordination: The Debt Management Office coordinates federal government borrowing and advises on all public sector loans.
Current Status
Rollout Stage: Active Coverage: All public bodies at federal, state, and local government levels Beneficiaries: Nigerian public through controlled and transparent government borrowing Funding: Not applicable — regulatory framework
How to Access
Public bodies must obtain formal ministerial or cabinet approval before contracting any loan External borrowing proposals must be submitted to DMO for review Loan agreements must be signed only by authorised signatories Application method: Public bodies submit borrowing proposals to the Federal Ministry of Finance / DMO.
Important Terms
Borrowing without approval is ultra vires and the responsible officers may be held personally liable State governments cannot borrow externally without Federal Government approval All public sector loans must be disclosed in the relevant annual budget and audited accounts
Official Resources
Website: https://www.dmo.gov.ng Contact: Debt Management Office (DMO) / Federal Ministry of Finance
Legal Framework
Enacted under the legislative powers of the National Assembly as the Borrowings by Public Bodies Act (Cap B12 LFN 2004). Operates alongside the Debt Management Office (Establishment, etc.) Act, the Fiscal Responsibility Act 2007, the CBN Act 2007, the External Loans Act, and the Infrastructure Concession Regulatory Commission Act. Aligns with IMF Debt Sustainability Analysis guidelines and the G20 Debt Service Suspension Initiative framework.