The Federal Government intends to issue Eurobonds in the International Capital Market (ICM) this year once it receives the approval from the National Assembly (NASS), Patience Oniha, Director- General, Debt Management Office (DMO) confirmed yesterday via her verified twitter account.
Oniha confirmed that the proposed issuance had gotten Federal Executive Council’s (FEC) endorsement. She didn’t give an amount to be raised. However, she added that the exact amount and time of issuance, after NASS’s approval, would depend on conditions at the international capital market. Responding to the avalanche of reactions, comments on the level of Nigeria’s debt stock grossing N32.92 trillion, she said debt comprised what federal, state and the Federal Capital Territory owe. According to her, “I am compelled to respond to some recent comments about the level of Nigeria’s public debt. First, it is useful to state that the public debt figures published by @DMONigeria are the debt stock of the FGN, the 36 states and the FCT.
“That is, the debt is not only that of the Federal Government of Nigeria as the FGN, state governments and the FCT have all been borrowing.” Giving insight into the increased debt, Oniha attributed it to a revenue plunge. “At the federal level, the increased level of borrowing since 2015 was due to the collapse in revenue from crude oil.
The level of new borrowing started trending downwards from 2018 up to the first 2020 Appropriation Act. Unfortunately, the adverse impact of COVID-19 on revenue and increased spending resulted in higher levels of borrowing. She said DMO was using the DSA and MTDS to manage the public debt in order to ensure that Nigeria’s public debt is sustainable and that borrowing is done at the lowest possible cost, and that growth in revenue remains a key focus of fiscal authorities.
Recall that the Federal Government had, on Tuesday, affirmed that its debt stock of N32.92 trillion was sustainable. Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, made the declaration in a conversation with International Monetary Fund’s (IMF) Africa Department Director, Abebe Selassie. Zainab said the government was bothered by pressure associated with debt servicing.
She lauded the World Bank Group and the Group of 20 (G20) for the recent debt service suspension initiative. “We are mindful of our experiences in this regard and the credibility and commitment of President Buhari to transparency and accountability in public expenditure. We take note that our current debt level is comparatively good, but we are aware of the pressures on debt services and commend the WBG and the Group of 20 (G20) for the debt service suspension initiative,” she added.