The Nation Newspaper

Tag: DMO

  • Nigeria’s external debt hits $6.5b, domestic N6.5t

    Nigeria’s external debt hits $6.5b, domestic N6.5t

    • Debt Management Depts now in states, FCT

    The Debt Management Office (DMO) has put Nigeria’s external debt at $6.5billion and domestic at N6.5trillion – as at the end of December, last year.

    Its Director-General, Dr. Abraham Nwankwo, who stated this yesterday, said the DMO has succeeded in creating Debt Management Departments (DMD) in all the 36 states and the Federal Capital Territory (FCT).

    He spoke at the sub-national debt sustainability analysis/portfolio review training for staff of the DMDs in Abuja.

    He said with the new structure,it is possible to accurately tell the world  what the Federal and state governments’ foreign and domestic debts are.

    He said after five years, the DMO “ can boast of a comprehensive debt data and an accurate state and federal foreign debts and state and federal domestic debts.”

    Nigeria has a comprehensive public debt data, which is good for economic transformation, he added.

    “However, having completed the first phase of creating DMDs in all the states and the FCT, the next stage will be “moving to the second phase of introducing sophisticated technology in managing the sub-national debts,” he added.

    The Debt Sustainability Analysis (DSA) exercise, Nwankwo said, he said “is one of the many tasks required to ensure that the collective achievement of creating DMDs will be internalised.”

    He said it is important to establish base line data which must be updated. The DMDs will have to contribute to the economy by ensuring sustainable domestic debts at the state level.

    He implored the managers of the DMDs to make the governors understand the importance of their jobs so that more funds and cooperation would be extended to the departments by the governors.

    On Nigeria’s debt profile, Nwankwo said the DMO has been reporting the country’s debt. “As at the end of December, 2012, the external debt of the country was $6.5 billion and domestic debt was N6.5 trillion. In terms of debt to GDP ratio, our debt continues to remain very sustainable and debt to GDP ratio as at that time was about 19.4 per cent, which is far much below the 40 per cent threshold for countries in our peer group,” he said.

    The DMO boss emphasised that the “government is not just only laying emphasis on the statistics, it is laying emphasis on value for money, ensuring that whatever is borrowed is used in such a way that it will help to maximise growth, money generation and poverty reduction,” he added.

  • DMO denies involvement in NNPC’s plan to borrow $1.5b

    DMO denies involvement in NNPC’s plan to borrow $1.5b

    THE Debt Management Office (DMO)has washed its hands off the attempt by the Nigerian National Petroleum Corporation (NNPC) to borrow $1.5 billion to pay off its debts.

    Sources at the DMO told The Nation that NNPC did not consult nor inform it of its intention to borrow.

    Several sources at the DMO expressed dismay with the corporation’s plan.

    “The money NNPC wants to borrow is not captured in the medium term economic framework,”one of the sources at the DMO said.

    The attempt by the NNPC to borrow the $1.5 billion, he said, can rubbish the Medium Term Economic Framework that was submitted to the National Assembly last year and which generated a lot of controversy.

    Another source said: “NNPC must seek the permission of the National Assembly before it can engage in any external borrowing. The $1.5 billion the NNPC wants to borrow is not included in the money the National Assembly has approved from the Medium Term Economic Framework of 2012.

    “If NNPC wants to borrow money externally, it should be included in government’s borrowing plan. That is why state governments come to defend their borrowing before the National Assembly.”

    The DMO officials, who spoke to The Nation, lamented that by attempting to borrow the $1.5 billion, “NNPC wants to be a nation unto itself, and it did not even consult the DMO either for advice or permission before going ahead with the idea to borrow the money.”

    When contacted, the Ministry of Finance offered no explanation on the matter.

    A former World Bank Vice President, Dr. Oby Ezekwesili, had warned that the $1.5billion loan amounted to financial recklessness and lack of transparency in the NNPC, warning that it should not be allowed to continue.

    “This level of elite parasitism that has been the hallmark of our oil sector is fatal. It’s unsustainable,” the former Minister of Education and one-time chair of the Nigeria Extractive Industries Transparency Initiative (NEITI), said.

    She blamed the Federal Government for allowing what she termed “Federal Republic of NNPC”, wondering: “Why does this administration encourage the idea of a “Federal Republic of NNPC in a Democratic Nigeria in 2013?”

    Human rights lawyer, Femi Falana (SAN), faulted the decision on legal grounds. He said: “The decision of the NNPC to take a loan of $1.5 billion is illegal and unconstitutional. The Federal Government or any of its agencies has no right to take local or foreign loans without the approval of the National Assembly. Section Six of the NNPC Act, which empowers it to borrow money with the approval of the Federal Executive Council, has to be read subject to the powers of the National Assembly before taking such loans.”

    But Managing Director, Financial Derivatives Company (FDC), Mr Bismark Rewane, justified the NNPC’s borrowing, arguing that if the NNPC failed to honour its obligations for offshore processing transactions, it would affect the country’s international credit rating.

    “If the NNPC does not borrow and pay its foreign creditors, our (Nigeria’s) credit rating will go down and this is not good for our financial institutions and the country,” he said.

     

  • ‘Nigeria needs $10bn to address infrastructural deficits’

    ‘Nigeria needs $10bn to address infrastructural deficits’

    Nigeria needs about 10 billion dollars annually over the next 10 years to address its infrastructural deficits, the Director-General, Debt Management Office (DMO), Dr. Abraham Nwankwo, said.

    He said this on Monday in Abuja while briefing State House Correspondents after a meeting of the Supervisory Board of the DMO at the State House.

    He said that a developing nation like Nigeria would record faster economic growth if there was a consistent flow of investment and loans to address developmental challenges.

    “As you know, Nigeria has huge infrastructural deficits and experts have estimated that it requires a minimum of 10 billion dollars (about N1.5 trillion) inflow per annum to close its infrastructural deficits over the next 10 years.

    “Government is finding ways of making sure that we maximise our internal revenue for the purpose of funding our various needs, including infrastructure.

    “That is why you can see that there has been a lot of improvement over the last two years in revenue collections from various sources, including the Customs and the Federal Inland Revenue Service, among others,’’ the News Agency of Nigeria quoted Dr. Nwankwo as saying on the issue.

    The DMO boss, who noted that the nation’s debt profile was N6.3 trillion for domestic debt and 6.29 billion dollars for external debt, however, stressed that the debt profile was sustainable.

    “There is nothing wrong in borrowing and incurring debts as long as the funds are judiciously and prudently used to finance projects that would be beneficial to the people, while measures are taken to reduce waste.

    “Government is trying to ensure that we manage our internal revenue and also take measures to reduce waste.

    “Nigeria’s public debt will continue to be sustainable but everything should be done to ensure that the (government’s) transformation programme is on course,” the DMO boss said.

     

     

     

  • DMO appoints Stanbic IBTC as FG’s broker

    DMO appoints Stanbic IBTC as FG’s broker

    The Debt Management Office has appointed Stanbic IBTC Brokers Limited as stockbroker to man Federal Government’s bond in the capital market.

    The Director -General of DMO, Dr. Abraham Nwankwo, made this known in Abuja on Tuesday at the signing of the agreement between the two organisations.

    He said the process of selecting the national stockbroker was transparent and that the Securities and Exchange Commission, the Nigerian Stock Exchange and the National Pension Commission were part of the selection process, among others.

    Nwankwo said that the involvement of the three organisations and others had made the process acceptable and would help to improve the bond market.

    He urged the stockbroker to adopt the best practice and be guided by the fact that there might be shocks in the market.

    Nwankwo said the appointment of IBTC stockbroker to man government’s bond was also aimed at ensuring that the bond market was properly listed and accepted at the stock exchange.

    Responding, the Chief Executive Officer of Stanbic IBTC Bank, Mrs. Sola David-Borha, gave assurance that the company would carry out the function effectively.

    She said the bank would educate the public on the issue of bond and ensure best practice, and noted that the capital market was deep and could accommodate shocks or turbulence.

    The News Agency of Nigeria reports that as a result of the agreement, Stanbic IBTC Brokers Limited will now be responsible for providing price for Federal Government bond on the floor of the stock exchange to enable retail investors to buy or sell.

    It will also liaise between the DMO, NSE, other stockbrokers and participants to ensure that all activities concerning the bond and Federal Government securities listed in the future are effective in the market.

     

  • Sinking fund is vital to public debt management – DMO

    Sinking fund is vital to public debt management – DMO

    The Debt Management of Office said the sinking fund established in the 2013 fiscal policy will guarantee effective public debt management in Nigeria.

    The Director-General of the office, Dr. Abraham Nwankwo, made this known in a chat with the News Agency of Nigeria (NAN) on the sidelines of the Annual meeting of the World Bank and International Monetary Fund in Tokyo, Japan.

    NAN recalls that N100 billion has been earmarked as sinking fund for domestic debt management in the 2013 budget presented to the National Assembly.

    “The sinking fund is an important aspect of effective public debt management, the whole essence, as has been said, is that government has embarked on a path of fiscal consolidation.

    “Part of that process is to, first of all, try to create more space for the private sector to be able to access long term money from the domestic bond market,’’ Nwankwo told NAN.

    He said that long term funds had been created since 2003 when government resuscitated the bond market.

    This, he said, was the reason why JP Morgan listed the Federal Government bond in its margin market bond index.