ECONOMIST URGES STATES TO INVEST BORROWED FUNDS

A Professor of Development Economics at Nnamdi Azikiwe University, Uche Nwogwugwu, has urged state governments to invest borrowed funds in productive sectors that can generate revenue and help them repay their debts.

Nwogwugwu said borrowing was not necessarily harmful to state finances if the money was channelled into investments capable of producing economic returns.

He said the major challenge was that successive administrations often abandoned economic programmes started by their predecessors and introduced new initiatives, making it difficult for states to build sustainable revenue sources.

The economist advised governments to identify areas where their states have economic advantages and direct investments towards those sectors rather than depending heavily on federal allocations and borrowing to finance recurrent expenditure.

He cited Imo State’s efforts to develop its gas sector under Governor Hope Uzodimma as an example of how states could explore their economic potential to create alternative sources of revenue.

Nwogwugwu said debt-financed projects should generate direct income, expand productive capacity, create jobs, support businesses or reduce future government spending.

He also called for greater continuity in state economic policies, urging new administrations to improve on successful programmes inherited from previous governments rather than abandoning them.

According to him, sustainable debt management requires states to build economic activities capable of generating recurring revenue and reducing dependence on federal allocations.