The Director-General of the Debt Management Office, Ms. Patience Oniha, says the agency will support the Federal Government to bridge the gap between country’s revenue and expenditure.
Oniha, who noted that the government had been operating deficit budget for many years, stressed that the debt office would focus on loan repayment and utilisaton to ensure proper implementation of the national budget.
She spoke during a forum with journalists in Lagos on Friday, the DMO said in a statement on Sunday.
The DG said, “For many years, the government had operated a deficit budget aimed at stimulating economic growth, because the revenue was less than expenditure.
“The DMO will support the government to bridge the gap between revenue and expenditure. We will focus on loan repayment and loan utilisation to ensure proper implementation of Nigeria’s budget.’’
On why the Federal Government had continued to raise capital from the market, Oniha explained that the focus on capital projects was a deliberate strategy to turn around the economy and boost infrastructural development.
“That is why government’s focus is on borrowing. We need to upscale things so as to achieve the goals of government.”
Fielding questions on why the government was going to refinance Treasury Bill stock with a proposed $3bn foreign loan, she said, “As most of you know, the treasury bill notice is in the public domain. Treasury bills are issued for a tenor of 364 days’ maximum and the discount rate is about 18 per cent to government. When you compare that to the rate of six to seven per cent in the international market, you realise straight away that there is a huge savings of 11 to 12 per cent which is what we are trying to take advantage of.
“It is not a new borrowing so it is not going to increase our debt stock. It is simply converting some of our naira debts to US dollars at a longer tenor and at a lower cost.”
The statement added, “Remember the point that I made about the benefits of doing that is longer tenor and cheaper rate. By the time that borrowing in US dollars is due for repayment, several of the initiatives and policies of government would have materialised so you are not looking at repaying in one or two years. The naira is either stronger at exchange rate or at best remain at the level we have now.”
The DMO boss solicited the support of the media in informing Nigerians on the management of the country’s debt stock and government’s drive towards infrastructural development.
Oniha said the DMO would continue to be in the forefront of openness and engagement with the media so that Nigerians would be better informed.
All rights reserved. This material, and other digital content on this website, may not be reproduced, published, broadcast, rewritten or redistributed in whole or in part without prior express written permission from PUNCH.