The Debt Management Office has announced the various initiatives it has put in place to ensure debt sustainability and economic development in the country.
This was disclosed by the DMO’s Director General, Patience Oniha at the 2022 National Budget Roundtable and Panel Discussion with the theme” National Budgeting for Economic Recovery and Sustainable Development in Nigeria.
Although, the government have put some initiatives such as the encouragement of the public-private partnership and revenue growth to ensure debt sustainability in the economy and to trail the economy in the path of growth and development. The DMO have also deployed some initiatives and tools which includes: the deployment of Debt Management tools of the World Bank and International Monetary Fund (IMF), spreading of maturities of domestic and external debts to avoid bunching of maturities, the use of wide variety of financial instruments such as; FGN savings bond, Sovereign Sukuk bond, Green bond, the 25year FGN bonds and 30 year FGN bonds, and, project tied financing alternatives such as the deployment of funds raised by the Sukuk and Green bonds for the construction of roads and some selected sectors in the economy.
She went further to explain that Nigeria maintains a low Debt to GDP ratio of about 22.8% in the economy, according to the data reported by the DMO, with Nigeria’s major external debt to World Bank group (48.6%) and domestic debt to FGN Bonds (72.56%).
Overall, she mentioned that Nigeria’s debt is cummulative and Nigeria always has to raise more funds to meet up with the deficit obligations in the economy. Thus, providing alternative sources of raising capital in the economy such as; the reduction of the Cash Reserve Ratio (CRR) of banks to the CBN to enable them grant more loans to businesses, which indirectly increases the businesses paying taxes in the economy; the proper dissemination of information to the public through the NGOs and the Ministry of Information; and the privatization of some government owned enterprises to ensure credibility and effective management.
