Nigeria’s external borrowing of $15.368 billion over the last ten years has helped to shore up the naira exchange rate, says the Debt Management Office (DMO).
The Director-General of the DMO, Ms. Patience Oniha, disclosed this yesterday in Zuba, Niger State, yesterday during a workshop on ‘Understanding Nigeria’s Public Debt Management’ organised for the secretariats of the Senate Committee on Local & Foreign Debts and House Committee on Aids, Loans & Debt Management.
According to her, the $15.368 billion which was raised from external borrowings between January 2011 and September 2021 strengthened the nation’s foreign reserves, thereby firming up the nation’s currency at the foreign exchange market.
Oniha explained that there were more to external borrowings than just raising funds to finance budget deficits.
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.
“Through these securities issuance in the international capital markets, the sources of funding for the Federal Government have 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.
“The new borrowings are undertaken in compliance with legislations and public debt is managed in accordance with international best practice and that debt is serviced in a timely manner. In the case of the later, the DMO undertakes an annual Debt Sustainability Analysis and is guided by a Medium Term Debt Management Strategy which is prepared every four years.”
2021 External Borrowing Oniha added that $4 billion out of the $6.18 billion approved external borrowing in the 2021 budget has been realized.
“For the external, which is about $6.18 billion, we raised $4 billion in September. We did have what you will call demand, which is same thing as order book or subscription of over $12 billion, but the advisers said to us, let’s drop the interest rate a bit and see how much we get and also $6 billion at once is huge”, she added.
