BY FOLASHADE KEHINDE
EXTERNAL borrowing amounting to $15.368billion helped to shore up naira exchange rate in the last 10 years, the Debt Management Office has said.
It said the $15.368 billion was raised from external borrowings between January 2011 and September 2021, adding that this strengthened the nation’s foreign reserves and firmed up the naira at the foreign exchange market.
The Director-General, DMO, Ms. Patience Oniha, disclosed this at the workshop titled, “Understanding Nigeria’s Public Debt Management” in Zuba, Niger State.
The workshop was organised for the secretariats of the Senate Committee on Local and Foreign Debts and House Committee on Aids, Loans and Debt Management.
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.”
The DG added, “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 debt is serviced in a timely manner. In the case of the latter, the DMO undertakes an annual Debt Sustainability Analysis and is guided by a Medium Term Debt Management Strategy, which is prepared every four years.”
According to her, $4 billion out of the $6.18 billion approved external borrowing in the 2021 budget has been realised.
“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 the same thing as order book or subscription of over $12 billion, but the advisers said, let’s drop the interest rate a bit and see how much we get and also $6 billion at once is huge,” the DG said.
