Patience Oniha, director-general of the Debt Management
Office (DMO), says federal government relied on debt to finance over 90 percent
of budget deficits.
Oniha disclosed this at a workshop on executive leadership
organised for the senate committee on local and foreign debts and the house
committee on aids, loans and debt management, on Monday, in Niger state.
According to the DMO DG, public debt was instrumental in
helping Nigeria bounce back from the recession caused by economic shocks, which
put a strain on the country’s revenue.
She added that government understands the need for caution
when borrowing, especially with mounting public debt and rapidly increasing
debt service obligations.
“It is true that the
public debt has been growing. We should remember that Nigeria has witnessed
economic shocks with major impacts on revenue that have resulted in recession
twice, and borrowing was a major tool for reversing the trends,” Oniha said.
“However, going forward, there should be a strong emphasis
on revenue generation from multiple sources other than crude oil to ensure that
debt is sustainable.”
According to her, those initiatives that have been
introduced to finance capital projects through Public-Private Partnerships should
be sustained to curtail the need for direct borrowing by the government to fund
infrastructure projects.
The DG also hinted that the DMO had created access for
Nigerian corporates in the international capital market through Nigerian Treasury
bills, FGN bonds, Savings bonds, Sukuk, Green bonds, Eurobonds, and Diaspora
bonds.
She informed that since 2017, when the DMO started issuing
Sukuk on behalf of the federal government, over N365 billion proceeds have been
realised in the issuances, while over $12 million worth of Eurobond has been
issued since 2011.
Clifford Ordia, chairman, senate committee on local and
foreign debts, in his keynote address, explained that debt is a veritable tool
for economic growth and development if properly managed.
He, however, said that effective debt management that
emphasises transparency, due process, and fiscal discipline can precipitate a
turnaround in the economy.
According to him, a clearly defined policy must be
articulated or reviewed by government to streamline projects that loans can be
obtained.
“As a Committee, we will give priority to projects that will
develop human capital and critical infrastructure that has the potential to
generate revenue and create employment”, he said
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