CBN Advert

newscorner

Business news

All borrowed funds disbursed according to plans- DMO

No Comments Share:

The Debt Management Office in Nigeria, says all government borrowings have been disbursed in line with agreed plans for which such funds were borrowed.

The Director General DMO,  Oniha in an interview with Voice of Nigeria said The Debt Management Office was functioning in line with its mandate as stated in the DMO Act, 2003.

She said that there is no controversy between the Federal and State Governments over debt management in Nigeria. The DMO Act 2003, Fiscal Responsibility Act 2007 and External and Domestic Borrowing Guidelines for Federal and State Governments and their Agencies issued by the DMO form the basis for debt management for all tiers of government.

‘All borrowing by the DMO on behalf of the Federal Government are disbursed by the relevant government offices in line with agreed plans such as the Appropriation Acts”.

She added that  necessary policies are in place to check borrowing by the Federal and State government .

“We are unaware that States are borrowing without due process.There are already provisions in the Laws and Guidelines as well as processes for managing sub-national debt. Some of these are, the Fiscal Responsiblity Act, 2007, Investment and Securities Act, 2007. External and Domestic Borrowing for Federal and State Governments and their agencies. Fiscal Sustainability Plan – Framework for Sub-national Governments”.

Reiterating that Nigeria’s debt is sustainaible, She said the country rating is good

in the world in terms of credit worthiness compared to other African Nations.

Nigeria’s debt is sustainable. A Debt to GDP Ratio of 17.76% as at June 2017 is within the 56% suggested by the World Bank for countries in Nigeria’s peer group.Nigeria’s Sovereign Rating is: B+ (Fitch Ratings), B- (Standard and Poor’s) and B1 (Moody’s). This places Nigeria in the same category as countries such as Kenya, Egypt and Angola, Nigeria’s debts (external and domestic) are sustainable. Public debt management tools will be deployed on a continuous basis to keep the debt sustainable

Speaking on the country’s bond, she said Nigeria’s bonds are meeting international standards and are very attractive in bond markets.

The Eurobonds issued by Nigeria in the International Capital Markets (ICM) in 2011, 2013 and 2017 and the Diaspora Bond issued in June 2017 were oversubscribed. This shows that they not only met international standards but were also attractive to investors. Foreign investors also invest in Nigerian Treasury Bills (NTBs) and FGN Bonds issued in Nigeria, which shows that they also meet international standards”.

She revealed that investors are already receiving returns on their investment

“Investors in FGN Bonds receive interest payment on the Bonds they are holding every 6months. Therefore, they are already receiving Benefits. For the FGN Savings Bonds, interest is paid to investors every quarter”.

She said the Green Bonds will soon be  issued when market conditions are favourable.

“Arrangements towards the issuance of Green Bonds are on-going and they will be issued after necessary arrangements are finalised and market conditions favourable”.

She however said that various initiatives, legislations and institutions are already in place to instill  fiscal discipline required to facilitate sustainable growth in Nigeria.

Previous Article

NSE Launches a state-of-the art Data Centre

Next Article

Forty-six NDIC members of staff graduate from Chartered bankers programme

You may also like

Leave a Reply

Your email address will not be published. Required fields are marked *