DMO defends Nigeria’s N35.5tr external debt

The Debt Management Office (DMO) has provided justification for borrowings by the President Muhammadu Buhari-led administration.

According to Patience Oniha, director general DMO, 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.

Oniha apoke at the Executive Leadership Workshop organised for Senate Committee on Local and Foreign Debts and House Committee on Aids, Loans and Debt Management in Niger State, on Monday.

She explained that over 90 percent of deficits contained in its annual Appropriation Acts was finance by money borrowed.

Nigerian public debt as at June 30 stands at N35.47trillion with external debt accounting for 38 percent.

“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.

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“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,” she said.

Speaking further the DG said the workshop was important for lawmakers to broaden their knowledge on borrowings – how it is done and why it is done.

“Public debt and debt management are at the interest of the public at large, and because the National Assembly has the power as contained in the DMO Act and the Fiscal Responsibility Act to approve those borrowings, it only means they should be knowledgeable about debt; how we borrow and what type of instruments we borrow, and to know about the levels of debt stock so that when requests are made to them to approve new borrowings, they have an understanding of it.

“This will make them better informed and also help us improve on our work,” she said.

According to Oniha, the workshop was “holding at a most auspicious time, when public debt has become very topical in the local and international environments. Phrases such as debt transparency, fiscal deficit, debt burden, debt trap, default, etc., have become the subject of analysis and media write-ups almost on a daily basis.”

“The DMO recognises that borrowing should be done with caution to meet developmental and sometimes, social needs and that proceeds are deployed judiciously,” she stressed.