FG Sets New Four-year Debt Management Strategy

• FG Sets New Four-year Debt Management Strategy

The Federal Government on Tuesday released the new National Debt Management Framework 2018-2022.

The Debt Management Office stated that the NDMF was a reference document, as well as a compendium of Nigeria’s key debt management policies, strategies and frameworks.

According to the DMO, the NDMF was designed to ensure that government’s borrowing activities were conducted in accordance with statutory provisions and regulations, as well as international best practices.

The third NDMF covered the period 2018-2022, and is expected to guide the activities and operations of Nigeria’s public debt management during the four-year period.

The framework included an assessment of the implementation of the NDMF for 2013-2017, in terms of realisation of its objectives and the challenges encountered on public debt management, as well as expectations for the future.

It stated that the third NDMF, 2018-2022, had been prepared with objectives which were to review the performance of the total public debt portfolio, in terms of costs and risks, by reference to the targets in the NDMF, 2013-2017; to implement aspects of the NDMF, 2013-2017, which were still relevant for the period, 2018-2022.

It would also incorporate the broad objective and the strategic objectives of the public debt function, as captured in the DMO’s strategic plan,2018-2022.

It equally aimed to incorporate the subsisting debt management strategy, 2016-2019, including the various public debt targets; to reflect and incorporate developments in the domestic financial market and the international capital market; and to review the external and domestic borrowing guidelines for federal, states, Federal Capital Territory, and their agencies.

The objectives of Nigeria’s public debt management are to use debt and debt-related instruments to support Nigeria’s development goals, while ensuring that public debt is sustainable.

This is expected to address both immediate and evolving challenges, which include changing investor needs and higher investor expectations from the DMO on product and services; government’s prioritisation of the development of infrastructure, which required new and more creative ways of financing; the growing contingent liabilities of the government and the expected increase in guarantees to support infrastructural development.