EUROBOND: DMO cautions Federal Govt, debt can bring old challenge

As the Federal Government pushes ahead with its Eurobond aimed at raising hard-currency funds from the global capital market, the Debt Management Office (DMO) has cautioned that while sourcing debt capital might be appealing, it could lead to return of old challenges for Nigeria.

Director General, Debt Management Office (DMO), Dr. Abraham Nwankwo, said debt capital raising requires arduous and painstaking plan to ensure that it does not lead to unintended negative consequences.

“One of the most appealing sources for a company, for instance, that has a challenge of revenue, is to look into debt. Getting debt is not as easy as that because it requires planning, so that you don’t go back to the same type of challenge again,” Nwankwo said.

Nigeria had piled up foreign debts and was trapped in debt servicing until the Olusegun Obasanjo administration negotiated and exited the foreign debts.

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Nwankwo rather called for a focus on firing up the productive base of the Nigerian economy and curtailing the import-dependent syndrome.

According to him, if Nigeria can replace as many things as she imports, it should be able to establish a sense of sustainability in terms of recovery.

He noted that for a country that has been used to high growth in the past 10 years and an economy that has a relatively steady source of revenue which has largely influenced consumption and investment on social programmes to collapse drastically due to the fall in the price of oil, it puts a greater burden on competent management of resources.

The DMO boss was optimistic that the measures taken so far by the Federal Government to ensure that the country’s economy becomes sustainable, would be fruitful, noting that there was no reason to despair.

According to him, the authorities were exploring other regenerative areas that abound in the country as part of measures aimed at strengthening the economy.

“Let me emphasis that our focus is on raising revenue in a way that we will use our resources to solve our problems. The focus for all us is to do whatever we can do to set ourselves on the path of sustainable growth. That path entails that we will diversify our economy in such a way that we have several sources of foreign exchange. That should be one of the indicators,” Nwankwo said.

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