$2.5bn Foreign Borrowing’ll not Increase Total Debt – DMO

0
104

Enterprise Television- $2.5bn Foreign Borrowing’ll not Increase Total Debt – DMO

The Debt Management Office made it certain to Nigerians that The planned borrowing of $2.5bn from foreign sources will not increase the nation’s total debt commitment.

The DMO said the debt would rather save the country N64bn per annum because the money would be used to liquidate some expensive local debts.

According to the agency, the foreign borrowing will not increase the country’s total indebtedness because the proceeds will be used to repay maturing local debts instead of rolling them over on maturity.

The DMO disclosed that the planned external financing of $2.5bn is for the refinancing of maturing domestic debt obligations of the Federal Government. It is not a new or incremental debt, because it will not lead to an increase in the public debt stock.

The agency explained that the debt substitution would also help to lengthen the maturity profile of the nation’s debt portfolio and leave more borrowing space for the private sector to access credit to grow the real sector, including export, which would increase the foreign exchange earning capacity of the economy.