THE Debt Management Office (DMO) has said that included in the Federal Government of Nigeria (FGN) Domestic Debt under the Baseline are contractual arrears and judgement debts of about N2.87 trillion that are being considered for possible clearance through issuance of Promissory Notes in 2023.
This is contained in Nigeria’s 2022 Debt Sustainability Analysis Report published by DMO.
The Market Access Country-Debt Sustainability Analysis (MAC-DSA) framework was used for 2022 DSA as in 2021.
According to the DMO, the FGN’s contingent liabilities, including guarantees in the sum of N4.58 trillion as of December 2021 was considered in the alternative scenario.
The Debt Sustainability Analysis (DSA) is a World Bank/International Monetary Fund tool for best practices in public debt management which the DMO adopted and has implemented over the past several years.
It is an annual exercise anchored by the DMO with the participation of key FGN agencies namely; the Central Bank of Nigeria, Budget Office of the Federation, Office of the Accountant-General of the Federation, National Bureau of Statistics and the Federal Ministry of Finance, Budget and National Planning.
Recent DSA reports have highlighted the need for more revenues to keep the public debt sustainable. The recently released DSA report, which is for the year 2022, also emphasises the need for the government to grow revenues.
The DMO’s Director-General noted that some of the recent policies of the present administration such as the removal of subsidies to manage expenditure and the focus on revenues through the appointment of a Special Adviser to the President on Revenue are positive steps for public debt sustainability.
The 2022 MAC DSA exercise was conducted by the DMO from December 6 to 10, 2022 in conjunction with other stakeholders, namely; the Federal Ministry of Finance, Budget and National Planning, CBN, Budget Office of the Federation, National Bureau of Statistics and the Office of the Accountant General of the Federation. The World Bank also participated in the exercise.
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