The Debt Management Office (DMO) pointed out that it raised over $15.368 billion through Eurobonds and a $300 million Diaspora Bond which stood as necessary support to foreign exchange.
This was disclosed by the Director-General of the DMO, Ms. Patience Oniha, to the Senate Committee on Local & Foreign Debts.
The goal of the Workshop was to educate Secretariat members on the DMO’s role in public debt management and to give them a better understanding of the DMO’s operations.
What the DMO is saying
DMO revealed that the federal government had issued around N1.5 trillion in Promissory Notes to a variety of debtors, including contractors and oil marketers.
Ms. Oniha stated that the DMO could borrow within and outside the shores of Nigeria. She said, “The DMO’s activities are not limited to domestic financial markets. It may please you to note that the DMO has raised over $15.368 billion through Eurobonds and a $300 million Diaspora Bond to finance budget deficits and various projects.”
She added that that the euro bonds raised funds were necessary to boost the foreign reserve thereby aiding the exchange rate.
She said, “Through these securities issuance in the international capital markets, the sources of funding for the Federal Government has expanded while it created opportunities for Nigerian corporates including banks to raise capital abroad. Perhaps, even more important, the proceeds of Eurobonds issued, increased Nigeria’s External Reserves thereby supporting the Naira Exchange Rate.”
She observed that the country’s debt sustainability review revealed a debt-to-GDP ratio of 21.61%, much below the country’s own 40% ceiling and the World Bank’s 55% recommendation. She did say, however, that the country needed to pay more attention to revenue.
She said “Our Debt-to-GDP is low, about 21.61% now. The limit we put for Nigeria is 40%, as a country, but the World Bank recommends up to 55%.”