Debt Management Office in War of Words With CBN, Says Nigeria Not at Risk of Debt Distress
- The Debt Management Office (DMO) has countered the Central Bank of Nigeria on the assertion made by one of its directors
- The DMO said that Robert Asogwa, who stated that Nigeria is at the risk of debt distress, made the statement without understanding country's borrowing needs
- The DMO stated that every borrowing by the Nigerian government is captured in the budget's medium term expenditure report
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The Debt Management Office (DMO) has responded to a statement by a CBN Director and member of the Monetary Policy Committee that Nigeria is at risk of debt crisis over its $15 billion Eurobonds.
The DMO denied the assertion in a statement on its website in response to an alarm raised by Robert Asogwa that the country’s rising debt, specifically, the increasing accumulation of Eurobonds in the external debt component may hurt Nigeria’s economy.
Source: UGC
CBN blows the alarm
Nairametrics reported Asogwa as saying that the Nigerian government’s appetite for Eurobonds at high-interest costs, with its attendant exchange rate, may hurt the country sooner than expected.
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According to him, the increasing deficits with the accompanying rising debt ratios are part of the weak links in the domestic economic environment.
The CBN top shot said that poor revenue in a time of growing government expenses has continued to spike budget deficit levels in Q2 of 2022, like what was experienced in 2021.
The DMO counters
In its answer, the DMO stated that the CBN director’s assertions may have been made without knowing the country’s borrowing needs as encapsulated in the Annual Budgets, Medium Term Expenditure Framework and the Debt Management Strategy.
According to the agency, borrowing needs are derived from annual budgets while the borrowing mix is predicated on the subsisting debt management strategy.
The DMO further stated that past Debt Management Strategy had shown that the Nigerian government’s preferred source of borrowing was concessional sources instead of commercial sources like Eurobonds.
It also revealed that due to these factors, Nigeria accesses concessional and semi-concessional loans as may be available, while issuing Eurobonds to part-fiance the annual budgets and the infrastructure projects contained therein.
To stop Nigeria from going into debt crisis, the DMO stated the importance of generating more revenues, significantly beyond the current levels.
Nigerian government invites citizens to buy bonds as DMO lists N250 billion Sukuk on Nigerian exchange
Legit.ng reported that the Debt Management Office (DMO) has listed the N250 billion 1o-year Ijara Sovereign Sukuk on 13 per cent due in 2031, on the Nigerian Exchange Limited (NGX).
The Ijara Sovereign Sukuk was listed after it met the requirements set by the Financial Regulatory Advisory Council of Experts (FRACE) of the Central Bank of Nigeria (CBN).
The CBN requirement states that trading in the instrument would only be allowed after the commencement of projects on the roads scheduled for construction of the Sukuk assets.
Source: Legit.ng
