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DMO faults IMF projection over Nigeria’s debt sustainability

. To sell N150bn FGN bonds

The Debt Management Office (DMO) has faulted the projection of the International Monetary Fund (IMF) that Nigeria may spend up to 92.6% percent of its revenue on debt servicing in 2022.

The IMF’s projection is contained in its recently released 2021 Article IV consultation report on Nigeria.

Agusto and Co, a credit rating agency, made a similar forecast of about 90% spend.

This is even as the DMO said it will auction N150 billion Federal Government bonds to investors tomorrow.

In a statement posted on its official Facebook page on Saturday, the DMO said while Nigeria’s debt and debt service levels may have grown over the years, the reports of the two bodies failed to consider the challenges experienced by the country in recent times.

These challenges include two recessions, sharp drop in revenue and security issues.

The statement reads: “Even more, the analyses do not acknowledge the improvements in infrastructure which have been achieved through borrowing, as well as the strong measures by the Government to grow revenues.”

It added that the federal government is already implementing policies towards increasing revenue generation and developing infrastructure through public-private partnership arrangements to improve debt sustainability.

Besides, it said the federal government had active and regular engagements with the IMF on borrowing and debt management.

Bonds offer

Regarding the offer for sale, DMO in a circular said the bond issuance will be done in two tranches valued at N75 billion each.

The first tranche is the 10-year, 12.5% FGN Jan 2026 re-opening bond, while the second is the 20-year, 13% FGN 2042 reopening bond.

The bonds will sell for N1,000 per unit, subject to a minimum subscription of N50,001,000 and in multiples of N1,000 afterwards.

Even more, the (IMF) analyses do not acknowledge the improvements in infrastructure which have been achieved through borrowing, as well as the strong measures by the Government to grow revenues.

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