Press Release on Medium Term Debt Management Strategy February 10, 2021

Wednesday, 10 February 2021 14:32

Federal Executive Council Approves a New Debt Management Strategy for Nigeria

          The Federal Executive Council (FEC) at its meeting today, February 10, 2021, approved a new Medium-Term Debt Management Strategy for Nigeria, for the period 2020-2023. The Medium-Term Debt Management Strategy (MTDS) is a policy document that provides a guide to the borrowing activities of a Government in the medium-term, usually four (4) years. It is recognized as one of the best practices in public debt management and is recommended by the World Bank (WB) and International Monetary Fund (IMF) to ensure that public debt management is driven by a well-articulated Strategy that is structured to meet a country’s broader macroeconomic and public debt management objectives. The MTDS, 2020-2023 has been prepared by the Debt Management Office (DMO), in collaboration with relevant stakeholders (Federal Ministry of Finance, Budget and National Planning, Central Bank of Nigeria, Budget Office of the Federation, National Bureau of Statistics and the Office of the Accountant-General of the Federation). 

2.       Nigeria has had two (2) Medium Term Debt Management Strategies (2012-2015 and 2016-2019), prior to the current Strategy. The new Strategy had to be re-worked to reflect the global and local economic impact of the COVID-19 Pandemic and incorporates data from the revised 2020 Appropriation Act and the Medium-Term Expenditure Framework 2021-2023. Thus, the new MTDS adequately reflects the current economic realities and the projected trends.

3.       The preparation of the MTDS usually involves the consideration of alternative funding strategies available to Government, as it seeks to meet its financing needs, taking into consideration the cost of borrowing and the associated risks, while ensuring debt sustainability in the medium to long-term.

4.       The 2016-2019 MTDS included some Debt Management Targets. The Targets and the Actuals at the end of the Strategy period, (that is, as at December 31, 2019) are shown in Table 1. As can be seen from the Actual Outcome, the MTDS, 2016-2019 was

applied in the borrowing activities of the Government during the period which led to the high success rates achieved.

   TABLE 1: MTDS, 2016-2019: TARGETS AND ACHIEVEMENTS

S/N Indicator

Actual

Dec. 31, 2015

Target

2016-2019

Actual

Dec. 31, 2019

Remarks
1

Fiscal Sustainability:

Total Public Debt as % of GDP

10.35%

Max. 25%

19.00%

Achieved

2

Portfolio Composition:

Domestic : External Debt Mix

84:16

60:40

67:33

Significant Improvement

3

Refinancing Risk:

i. Average Tenor of Debt Portfolio

ii. Long-Term:Short-Term Domestic Debt Mix

7.15 years

71:29

Min. 10 years

Min.75:Max.25

10.5 years

79:21

Target was exceeded

Target was exceeded

The New MTDS, 2020-2023 and the Debt Management Targets

5.       Based on the current Public Debt Stock, Government’s borrowing needs in the medium-term (as stated in the 2021 Appropriation Act, MTEF, 2021- 2023), as well as future global trends, Nigeria’s 2020-2023 MTDS can be summarized as follows: “Borrowing will be from domestic and external sources but a larger proportion of new borrowing will be from domestic sources using long-term instruments while for External Borrowing, concessional funding from multilateral and bilateral sources will be prioritised”. The new Targets for the MTDS 2020-2023 are shown in Table 2.

TABLE 2: MTDS, 2020-2023 TARGETS

S/N Indicator

Target

2020-2023

Justification
1

Fiscal Sustainability:

Total Public Debt as % of GDP

Max. 40%

  • Increased from 25% to 40% in order to: accommodate new borrowings to fund Budget Deficits and other obligations of Government; Promissory Notes to be issued to settle Government Arrears; and, the Ways and Means Advance at the Central Bank of Nigeria.
  • This ratio is still well below the WB/IMF’s recommended threshold of 55% for countries in Nigeria’s peer group.
2

Portfolio Composition:

Domestic : External Debt Mix

Max.70:Min.30

  • To further strengthen the domestic debt market and optimize access to both Concessional and Commercial sources of funding.
3

Refinancing Risk:

i. Average Tenor of Debt

   Portfolio

ii. long-Term:Short-Term

    Domestic Debt Mix

Min. 10 years

Min.75:Max.25

  • To sustain the issuance of longer-tenored instruments with tenors of 10 years and above, in order to effectively manage Refinancing Risks.

Conclusion

6.       The implementation of the Medium-Term Debt Management Strategies over the years, has helped in managing the structure of the growing public debt, and ensured debt sustainability, as well as effectiveness in public debt management. With the approval of the Federal Executive Council of the MTDS, 2020-2023, the Strategy will be implemented to support economic development while ensuring that the Public Debt is sustainable.

DEBT MANAGEMENT OFFICE

The Presidency

NDIC Building (First Floor),

Plot 447/448 Constitution Avenue,

Central Business District,

P.M.B. 532, Garki, Abuja

Tel: +234 - 8110000881-3

Website: http://www.dmo.gov.ng,

Email: This email address is being protected from spambots. You need JavaScript enabled to view it.

February 10, 2021

 

Nigeria Redeems USD500 Million Eurobond

Thursday, 28 January 2021 12:42

The Debt Management Office (DMO) has announced that Nigeria’s 6.75% USD500M JAN 2021 Eurobond which matures on January 28, 2021 will be redeemed. For this purpose, funds have been made available by the Federal Government of Nigeria to the Fiscal Agent to repay the principal sum of USD500 million and final Interest payment due on the Eurobond.

By this development, Nigeria continues to demonstrate in practical terms, its commitment towards honouring all its debt service obligations as and when due.

DEBT MANAGEMENT OFFICE

The Presidency

NDIC Building (First Floor),

Plot 447/448 Constitution Avenue,

Central Business District,

Tel: +234 - 8110000881-3

Website: http://www.dmo.gov.ng,

Email: This email address is being protected from spambots. You need JavaScript enabled to view it.

January 28, 2021

Press Release: Public Debt Stock as at September 30, 2020

Thursday, 31 December 2020 16:12

DEBT MANAGEMENT OFFICE

NIGERIA

PRESS RELEASE

PUBLIC DEBT STOCK AS AT SEPTEMBER 30, 2020

The Q3, 2020 Total Public Debt Stock released by the Debt Management Office (DMO), revealed that the Total Public Debt Stock stood at N32.223 Trillion or USD84.574 Billion. The Debt Stock is made up of the Domestic and External Debt Stocks of the Federal Government of Nigeria (FGN), the 36 State Governments and the Federal Capital Territory (FCT). The break down of the Public Debt Stock showed that 37.82% was External, while the balance of 62.18% was Domestic.

Compared to the Total Public Debt Stock of N31.009 Trillion as at June 30, 2020, the Debt Stock in Q3 2020 increased by N1.214 Trillion or 3.91%. The FGN, State Governments and the FCT all recorded increases in their Debt Stock due to borrowings to enable them respond appropriately to the COVID-19 Pandemic and to meet revenue shortfalls. Issuance of Promissory Notes by the FGN to settle inherited liabilities have also contributed to the growth in the Public Debt Stock since the year 2018 when they were first issued. While N20.136 Billion of Promissory Notes were issued in Q3, 2020, as at September 30, 2020, the Promissory Notes Outstanding, which are all included in the Domestic Debt Stock, stood at N971.878 Billion.

DEBT MANAGEMENT OFFICE

The Presidency

NDIC Building (First Floor),

Plot 447/448 Constitution Avenue,

Central Business District,

Tel: +234 - 8110000881-3

Website: http://www.dmo.gov.ng,

Email: This email address is being protected from spambots. You need JavaScript enabled to view it.

December 31, 2020

President Buhari Justifies Borrowing to Fund Infrastructure

Wednesday, 16 September 2020 13:16

President Muhammadu Buhari Tuesday justified government borrowing to finance infrastructure, asserting that his government took loans in the interest of the country to solve the dire shortfall in infrastructure.

Speaking at a virtual meeting with members of the Presidential Economic Advisory Council (PEAC) at the State House, in Abuja, President Buhari said the country must fix its roads to save lives from soaring road accidents.

“We have so many challenges with infrastructure. We just have to take loans to do roads, rail and power, so that investors will find us attractive and come here to put their money,’’ the President said after listening to a presentation by PEAC chaired by Professor Ayo Salami.

He regretted that the failure to provide the infrastructure for effective transportation deprived the country of its well-deserved status as the West African hub for Air cargo transportation and trans-shipment of goods.

Press Release - Facts About Chinese Loans to Nigeria

Thursday, 18 June 2020 23:16

The attention of the Debt Management Office (DMO), has been drawn to statements and reports credited to several persons on the subject of Loans obtained from China and has considered it necessary to provide a sequel to its Press Release on the same subject dated September 11, 2018.

The Debt Management Office as a Catalyst for the Development of Infrastructure

Thursday, 23 July 2020 10:16

The Debt Management Office (DMO) which is the agency of the Government charged with the management of the public debt, has in its almost twenty (20) years of existence supported the Federal Government of Nigeria (FGN) by raising funds to finance various capital projects as approved in the Appropriation Acts. Whilst performing this role, the DMO has been pivotal in the development of the domestic financial markets and is credited with the introduction of new products, such as Sukuk and Green Bonds. This is in addition to issuing long-tenored FGN Bonds to enable project financing not only for the FGN but also for State Governments and Corporates.

Press Release on Global Investors Meeting

Tuesday, 14 July 2020 12:41

The Debt Management Office (DMO) working with Citibank organised a virtual meeting between Nigeria’s economic managers (The Federal Ministry of Finance, Budget and National Planning (FMFB&NP) and the Central Bank of Nigeria (CBN) and Institutional Investors across the continents of the world. The Meeting was held on June 23, 2020.