The Debt Management Office (DMO), in a dismissal of an earlier report by Bloomberg, says that Nigeria is not planning to restructure its debt.
The clarification by the DMO was in reaction to recent reports by Bloomberg and other media platforms that the Minister of Finance, Budget and National Planning, Zainab Ahmed, said that the Federal Government was considering restructuring its debt and extending the repayment period of its credit obligations.
This disclosure is contained in a statement issued by DMO on October 13, and can be seen on its official Twitter account.
The DMO which had said that the Minister’s statement was taken out of context, stated that Nigeria is exploring bond buyback and bond exchanges to manage its debt liability.
What the DMO is saying
The statement from DMO reads, ‘’Our attention has been drawn to the recent report by Bloomberg attributing statements to the Honourable Minister of Finance, Budget and National Planning that Nigeria is planning to restructure its debt. We wish to state that the Minister’s statement was taken out of context.
“Over the years, Nigeria’s Debt Management Strategy has always highlighted the need to utilise appropriate debt management tools to streamline the cost and risk profile in the debt portfolio.
“Toward implementation of these strategies, Nigeria has typically availed itself of concessional loans, the spreading out of debt maturities to avoid bunching, and re-profiling of debt maturities by refinancing short-term debt using long-term debt instruments.
“All of these, none of which constitute debt restructuring, are already being implemented.
‘’The Nigerian Government is also looking forward to exploring other appropriate debt liability management options such as “bond- buy back” and “bond exchanges”.
“We want to assure local and international investors and creditors that Nigeria remains committed and will meet all its debt obligations.’’
What you should know
- Recall that there were earlier reports on October 13, 2022, that the Finance Minister, Zainab Ahmed, had during an interview with Bloomberg TV, hinted at plans by the Federal Government to restructure Nigeria’s debt with the extension of the repayment period of its loan facilities as the debt service burden rises.
- Ahmed, who said that the government has engaged the services of consultants for advice, noted that it plans to refinance domestic debt obligations that are due this year and next, while the country’s N20 trillion ($45.4 billion) in outstanding borrowings from the Central Bank of Nigeria (CBN) will be converted into government bonds.
