•Nigeria exports debt management skills to Zimbabwe
Nigeria’s total debt stock stood at $37 billion (about N5.55 trillion) in June.
But Abraham Nwankwo, director-general, Debt Management Office (DMO), assures it is healthy, despite growing fears that government’s borrowing is fast exceeding limits.
Nwankwo says this level of debt is only 19 percent to the nation’s Gross Domestic Production (GDP) ratio and is still low compared with the 40 percent globally acceptable standard for countries in the same group.
The nation’s domestic debt profile increased from N4.229 trillion in September to N4.55 trillion in December 2010.
“The total debt is about $37 billion. Our debt-GDB ratio hovered around 19 percent which is much below the 40 percent, but what is important to us at the DMO is government’s commitment to ensure value for money, not only on borrowed funds but on all revenues,” he said.
The disclosure came as a Zimbabwean team of public debt managers came visiting Nigeria to acquire debt management skill and particularly, learn the peculiar processes that led to the nation’s debt forgiveness during former President Olusegun Obasanjo’s administration.
Their week-long visit which began yesterday aims at leveraging on Nigeria’s experience while tackling its debt profile, which they now plan to copy to address the country’s present huge debt challenge and possibly obtain debt relief from its current $8 billion external debt.
Specifically, the team will be understudying the processes of establishing and running an effective debt management office and will visit some of the key stakeholder institutions, whose activities have bearing on public debt management.
These institutions include the Central Bank of Nigeria (CBN), Securities & Exchange Commission (SEC) and the Office of the Accountant General of the Federation (OAGF). This visit is also with a view to demonstrating in practice, the close collaboration, understanding and the policy linkages between Monetary, Fiscal and Debt Management operations in Nigeria’s Public Finance Management, as well as, the financial market development.
According to the DMO director general, the team’s visit is a result of a strategic decision by the debt management office some two years ago to also develop skills and capabilities that could be exported to other countries, apart from developing debt management in Nigeria.
Nwankwo, meanwhile, also announced that the office has made monumental strides since its establishment, especially in the area of leveraging on public debt to improve infrastructure in the economy.
To him, every state in Nigeria has a functional debt management department in place, emphasising that out of the 36 states, DMO has been able to reconstruct debt data for 22 states.
“Our sister, Zimbabwe has recognised the little that we have achieved, it is also natural that we look for best ways to continue to assist them not just for a week but by having continuous exchange with them.
So, we will continue to transfer our skills and capabilities and importantly, share our experiences with them and we could also learn a number of things from them,” said Nwankwo.
Further assuring of Nigeria’s support, he added: “We are going to assist them build up their public debt management institutions, skills and processes even as we continue to improve on our own capabilities.”
In the recent past, the DMO had at various times, played hosts to some African countries, including Uganda and Sudan on similar missions.
Nwankwo said a Memorandum of Understanding may or may not evolve from the meeting but that what matters is the level of commitment of the two parties to pull through the agreements reached.
He further encouraged the Zimbabwean debt management team to be sensitive to the peculiarities in the Zimbabwean economy, putting in place necessary initiatives to meet the local needs.
Andrew Dvumbe, head of aid and debt management, Zimbabwe, who led the team of public debt managers, noted that their huge interest in Nigeria for solution to their own country’s debt problems, is particularly due to the nation’s experience and expertise.
“We’re here to learn. We’ve a model. We decided that we do not need to re-invent the wheel because it is in Nigeria. We are also interested in debt relief and it will be interesting to identify the experts that assisted Nigeria,” he stressed.
On whether Zimbabwe deserves debt relief at this point, Dvumbe said that given the peculiarity of his country’s situation and what has happened to the country in recent years, Zimbabwe has a good case for debt relief.
“Our country deserves debt relief given that we have been isolated for the past ten years, the political differences we had with the whites, and given the relationship we have had with the West which has been quite difficult. So, I think, we will need a peculiar consideration for Zimbabawe,” he argued.