The Debt Management Office (DMO) of the Federal Republic of Nigeria has postulated that the federal government continuous borrowing has instigated economic recovery from recession on two separate occasion and has also been a catalyst for increased Gross Domestic Product (GDP) level.
The Director- General of the Debt Management Office, Patience Oniha, disclosed this during an executive leadership workshop designed for capacity development for DMO stakeholders. She explained that public debt is an important factor in supporting Nigeria’s economic recovery considering the numerous economic uncertainties surrounding business cycles, which in turn determines revenue flow and generation.
She further stated that the federal government are fully cognizant about the national debt profile and debt servicing requirements.
“It is true that the public debt has been growing. We should remember that Nigeria has witnessed economic shocks with major impacts on revenue that have resulted in recession twice, and borrowing was a major tool for reversing the trends,” she said.
“However, going forward, there should be a strong emphasis on revenue generation from multiple sources other than crude oil to ensure that debt is sustainable.”
She stated that Public- Private Partnership must be sustained to finance capital projects to minimize requirements imposed by governments for direct borrowing to fund infrastructure projects.
According to Oniha, Nigerian corporates now have access to the International Capital Market through Nigerian Treasury Bills, FGN Bonds, Savings Bonds, Sukuk, Green Bonds, Eurobonds, and Diaspora Bonds.
Concurrently, since 2017, when the DMO began issuing Sukuk on behalf of the federal government, the issuances have generated over N365 billion in proceeds.