Nigeria Economy | |
Nigeria Economy | |
757 VIEWS | |
![]() |
Tuesday, February 23,
2021 / 5:43 PM / by DMO / Header Image Credit: DMO
Introduction
Nigeria's
Medium-Term Debt Management Strategy (MTDS), 2020-2023, is formulated to guide
the borrowing activities of the Government in the medium-term. The framework
compares alternative funding strategies available to Government as it pursues
the desired structure of debt portfolio that reflects the selected strategy
considering the costs and risk trade-offs in the medium-term.
Following
the expiration of the MTDS, 2016-2019 in December 31, 2019, it became
imperative to develop a new Strategy for another term, 2020-2023. To this end,
the Debt Management Office (DMO), in collaboration with relevant stakeholders - The Federal Ministry of Finance, Budget and National Planning (FMFBNP); Central
Bank of Nigeria (CBN); Budget Office of the Federation (BOF); National Bureau
of Statistics (NBS); and Office of the Accountant-General of the Federation
(OAGF), with technical support from the World Bank, IMF and the West African
Institute for Financial and Economic Management (WAIFEM), proposed a new Debt
Management Strategy for the period, 2020 – 2023.
While
the Report of the new MTDS was being finalised for approvals, by the Honourable
Minister of Finance, Budget and National Planning (HMBNP), and thereafter,
Federal Executive Council (FEC), the global economy was hit by the COVID-19
pandemic. The fiscal position of most countries including Nigeria worsened.
In
the case of Nigeria, the impact of COVID-19 on crude oil prices saw over a 50
percent dip in Revenue, and a reduction in Crude Oil production and sale, as well
as a limitation in terms of the level and sources of funding available to the
Government, including access to the International Capital Market (ICM). These
developments rendered the various assumptions and projections of the Draft
MTDS, 2020-2023 exercise unrealistic, hence, the need for a revision of the
Draft Strategy.
Review of the 2016-2019 Medium-Term Debt Management Strategy
The
outcome of the implementation of the MTDS, shows progressive improvements over
the 2015 levels, for all the Indicators, during the implementation period, with
some outcomes exceeding the Targets set in the Strategy. These are highlighted
in Table 1.
The
review of the MTDS, 2020-2023 took into consideration the following parameters:
Related News
1. FEC
Approves a New Debt Management Strategy for Nigeria for 2020-2023
2. Outlook
2021: Eyeballing Major Economic Indicators in 2020 - Nigeria's Public Debt
3. Budget
and National Strategy: Leverage and Synergy Potentials
4. IMF
Executive Board Reviews IMF Debt Sustainability Framework for Market Access
Countries
5. Nigeria
Redeems USD500m Eurobond - DMO
6. Nigeria's
Deficit Monetisation May Raise Macro-Stability Risks
7. DMO:
An Issuance Calendar Amid Many Uncertainties
8. FGN's
External Debt Service Obligations Reached a Total of US$507m in Q3 2020
9. Nigeria's
High Recurrent Costs, Low Revenue and Escalating Debt Numbers
10. 62.18%
of Nigeria's Total Public Debt as of Q3 2020 Was Domestic - NBS
11. DMO
unfolds new debt management strategy