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Tag: Dr. Abraham Nwankwo

  • DMO’s Abraham Nwankwo bows out from office

    DMO’s Abraham Nwankwo bows out from office

    One of Nigeria’s longest serving public servant, Dr Abraham Nwankwo, Director General of Debt Management Office (DMO) will bow out from office on Friday after serving  for ten years. 
     
    Dr. Abraham Nwankwo was appointed Director-General of the Debt Management Office in 2007, having joined the services of the agency in 2001 as Assistant Director. In-between (July 2006 – July 2007), he had a stint at the Board of the World Bank where he served as Senior Advisor to the Executive Director (Africa Group II Constituency).
    One of the significant achievements of the Abraham Nwankwo reign at DMO was the conducting of Debt Sustainability Analysis on every State to decide whether or not to approve each request for new borrowing. The analysis led to  a drastic curtailment and mitigation of risk of over borrowing by the States.
     
    The Debt Sustainability Analysis initiative of the DMO formed part if the Sub-national Debt Management Initiatives and Achievements of the organization.
    The DMO under Nwankwo in its quest to ensure prudent management of resources and the adoption of sound public debt management practices at all levels of governance, developed a comprehensive programme for Sub-nationals which would enable them effectively determine their domestic debt stock and manage it as a matter of routine.

    The DMO also successfully marketed Nigeria’s FGN bonds which are debt securities (liabilities) of the Federal Government of Nigeria (FGN) issued by the Debt Management Office (DMO) for and on behalf of the Federal Government.

    Before joining the Public Service, Nwakwo had worked in the banking and finance sector where he held top management positions; in Academics, as a lecturer in Economics at the University of Nigeria, Nsukka for about five years; as well as in journalism as an Economics Journalist with the New Breed Organization.

    He had all his University degrees from the University of Nigeria Nsukka: B.Sc. Economics (1980) – Winning the Prize for the best Economics degree; M.Sc. Economics (1983); and Ph.D. Economics (1985) – Winning the University Prize for outstanding Ph.D. research. He was the first Ph.D. graduate in Economics produced by the University of Nigeria, 25 years after the institution was established.

    In addition to numerous Publications in Academic Journals, he is also a creative writer. His published works in Literature and Economics include: “Minds of Time” (Poetry), “Tatu” (Drama) and “Oracles for Heroes” (Prose) – all published by Delta Publishers in 2004; “Through the Storm” (Drama) and “Stable Growth & Foreign Exchange” – both published by Evans Brothers in 2011.

  • DMO lists FGN Savings Bond on NSE to service budget deficit

    DMO lists FGN Savings Bond on NSE to service budget deficit

    The Debt Management Office (DMO) on Wednesday listed series 1 of the Federal Government of Nigeria (FGN) Savings Bond worth N2.067 billion at N1,000 on the Nigerian Stock Exchange  (NSE).

    Dr Abraham Nwankwo,  DMO Director-General,  said in Lagos that the listing became imperative to guarantee liquidity of the bond.

    The News Agency of Nigeria (NAN) reports that the savings bond, the first of its kind in Nigeria was opened to the investing public by way of offer for subscription over a five-day offer period.

    The five-day period began on March 13, and would end on March 17, with N2. 067 billion raised from the retail market at 13.01 per cent coupon.

    Abraham stated that the bond would help to finance the nation’s budget deficit.

    According to him, the bond with subscription units of 2,577 will be issued monthly in tenors of two and three years, with quarterly payment of interest to investors.

    Nwankwo said that the response to the bond had been huge as individuals made enquiries with interest to participate in the bond.

    According to him, the bond will provide retail investors and ordinary Nigerians the opportunity to partake in infrastructural development of the country as well as generate good returns on their investments.

    “Over a year ago, the NSE mentioned the possibility of introducing retail bonds and we started working on it, with the team on NSE with the CBN, Securities and Exchange Commission and with other agencies that are relevant.

    “The FGN bond is meant for every Nigerian both at the grassroots as well as the common man.

    “The objectives of the bond had been achieved from the beginning as about 95 per cent of the subscriptions were from average individual Nigerians.

    “This means the grassroots’ common man dominate the FGN Saving Bonds,” Abraham stated.’’

    He said that the success showed that the initiative taken by the financial system and the NSE and other players in the market including stock broking community, had yielded fruits in terms of financial inclusiveness.

    The director-general commended all the stakeholders for the successful issuance of the first FGN Savings bond and urged Nigerians to be optimistic on the future of the nation’s economy.

    Also speaking, Mr Haruna Jalo-Waziri, NSE Executive Director, Capital Markets, said that the exchange was delighted with the savings bond listing which would mature in March 2019.

    Jalo-Waziri said that the bond among others would help to enhance the savings culture among Nigerians, while providing all citizens irrespective of income level an opportunity to contribute to national development.

    He stated that the FGN Savings Bond was safe and backed by the full faith and credit of the Federal Government of Nigeria, with quarterly coupon payments to bondholders.

    According to him, an interested investor needs to approach any of the accredited brokers and require only the sum of N5, 000 to subscribe with additions in multiple of N1, 000 subject to a maximum amount of N50 million.

    “We are pleased to list the series 1 of this innovative investment offering that caters to the retail segment of the Nigerian Capital Market.

    “The off take of the first tranche underpins the efforts of the Federal Government to continue to work with stakeholders to deepen the capital market while delivering value to investors at all income levels.

    “We look forward to continue the collaboration with DMO to list subsequent series of the Savings Bond”, Jalo-Waziri added.

  • Fed Govt’s external borrowing to go up 40%

    Fed Govt’s external borrowing to go up 40%

    The Federal Government yesterday said it would increase external borrowing to 40 per cent as part of its new debt management strategy over the next four years.

    Addressing reporters on the details of the new debt strategy, Director-General, Debt Management Office (DMO) Dr Abraham Nwankwo said the mix of the borrowings will be 60 per cent domestic while the 40 per cent will be sourced externally as against the old ratio of 84 per cent domestic and 16 per cent external.  He said the borrowing will be progressively increased, taking into account the need to moderate foreign exchange risk in the short to medium-term.

    Nwankwo justified the shift on the ground that external borrowing was cheaper than internal borrowing. He said: “There will be lower cost of fund and we will be avoiding the risk of crowding out the private sector.”

    The private sector, Nwankwo added, will still be expected to play a leading role and will be required to mobilise more funds as well as complement government’s efforts.

    With greater emphasis on external borrowing in the years to come, the DMO chief assured that servicing the debts, given the country’s challenging forex circumstances will not be a problem because Nigeria has abundance of opportunities to explore to diversify her economy and earn forex outside crude oil.

    According to the Director-General, the Debt Management Strategy (DMS) “is about how funds are borrowed, internally and externally. It is  a medium term project from 2016 to 2019 that sets out the broad guidelines within this four years”.

    Nwankwo noted that existing sources of financing and instruments are expected to be used going forward, but that “the DMO plans to introduce new products with a view to further diversifying the investor-base, boost financial inclusion and national savings culture for increased gross capital formation, create more benchmarks and deepen the domestic and external markets for government securities.”

    According to him, the new debt instruments to be introduced, subject to market condition, are: for the domestic Debt Market-retail bond, inflation-linked bond and domestic Suku; for the International Capital Market, there will be the Diaspora bonds (the process of issuance is ongoing) and international Sukuk.”

    Other components of the new Debt Management Strategy are targeting a domestic debt mix of 75:25 for long and short-term debts, respectively, (currently at 69:31 as at the end of last year), so as to reduce the cost of debt servicing and roll-over risk.

    Funding sources for the debt management strategy will include maximisation of available funding envelopes from concessional and semi-concessional external sources, taking into account what may be readily available within a given period for the financing of key infrastructure projects.

    The Interest Rate and Refinancing Risks of the DMS has been designed to keep the share of debt maturing within one year, as a percentage of total debt portfolio at not more than 20 per cent, relative to 29.15 per cent as at the end of last year; and targeting an Average Time-to –Maturity (ATM) for the total debt portfolio at a minimum of 10 years as against 7.15 years as at the end of last year.

    The preferred debt management strategy adopted by the Federal Government, Nwankwo said is based on  economic realities and would require an increase in external financing with a view to rebalancing the public debt portfolio in favour of long-term external financing in order to reduce the debt service cost and lengthen the maturity profile.

    Nwankwo said: “To achieve a significant reduction in cost would require that the government accesses relatively cheaper long-term external financing in such a way that it first maximises the available funds from the concessional  and semi-concessional sources, taking into what may be readily available within a given period, after which other external sources would be accessed.”

  • $1b Eurobonds good for economy, says DMO chief

    The $1 billion Eurobonds raised by Nigeria from the International Capital Market (ICM) has added value to the economy, the Director-General, Debt Management Office (DMO) Dr. Abraham Nwankwo said.

    The DMO chief, who spoke after Nigeria was awarded 2013 Best Sovereign Bond in Africa Award, said the agency’s decision to issue the bonds despite the risk the pronouncements of United States (US) Federal Reserve tapering of the Quantitative Easing (QE) may have on the pricing of the bonds at that particular time was commendable.

    In a statement, he said the award was given to Nigeria by the Emerging Market, Europe, Middle East and Africa (EMEA) Finance, adding that the bonds were over-subscribed vindicating the right judgment of the DMO.

    He explained that QE is a bond-buying programme of the Federal Reserve, which was designed to depress long-term bond yields in order to stimulate the US economy. He explained that so far, the QE has kept yield below levels where they would trade if there had not been the QE policy in place.

    Continuing, he said to understand the risk taken last year by DMO, when it offered two Eurobond in tenors of five and 10 years, each for $500 million, is to know that the Fed was buying $85 million fixed-income securities on the open market monthly during that period through the QE policy.

    “Yet our bonds were oversubscribed. One factor that accounts for the success of the offer was the confidence investors have in Nigeria’s economy. And as we all know confidence is always earned,” he said.

    Nwankwo said the issuance of the Eurobond was part of the DMO public debt management strategy which decided to look up to the ICM to diversify Nigeria’s source of funding its developmental programmes to introduce the country into the highly disciplined international funds markets.

    “In January 2011, Nigeria made its debut in the ICM through issuance of $500 million 10-year Eurobond. Since then, the confidence of the investors in Nigeria’s bond has been on the increase. Most of the funds generated will go into financing the upgrading our power infrastructure, which the country badly needs for its economic growth and development,” he said.

    While handing the award to Finance Minister Dr. Ngozi Okonjo-Iweala, Chief Executive Officer,  Citigroup for Europe, Middle East and Africa, Jim Cowles, said DMO was bold in taking the Eurobond decision.

    “If you look at the timing , this (Nigeria’s issued Eurobond) was the first sovereign bond that was issued at the beginning of last year and there was quite a bit of turmoil in the market place because of the discussion on tapering the quantitative easing.”

    He praised the professionalism with which the DMO is managing Nigeria’s debt profile. The DMO has been advising government on terms and conditions of loans, restructuring and refinancing; maintaining a complete and accurate database of all government borrowings among other roles.