The Debt Management Office - Establishment             

The DMO was established on 4th October, 2000 to centrally coordinate the management of Nigeria’s debt,both internationally and locally which was hitherto being done by a myriad of establishments in an uncoordinated fashion. This diffused debt management strategy led to inefficiencies. For instance, in the FMF alone, four different departments have functions for the management of external debt in the following format:

  • External Finance Department: responsible for all Paris Club debts and for the management of public debt statistics;
  • Multilateral Institutions Department: responsible for relationships with all multilateral institutions (excluding the African Development Bank and its subsidiaries such as ADF and the NTF, which is handled by the ABER Department). It is also responsible for managing and servicing multilateral debt;
  • Africa and Bilateral Economic Relations (ABER) Department: responsible for liaising with the ADB and its subsidiaries, ECOWAS, and all non-Paris Club bilateral creditors;
  • Treasury Department (OAGF): responsible for issuing mandate to the CBN for payment of all external debts;
  • Foreign Exchange and Trade Relations Department: responsible for issuing reconfirmation for payment externalization to the CBN and for documenting repayment and servicing of external debts;

 

In the CBN, the following departments had some involvement with external debt
management:

  • Debt Management Department: responsible for the London Club debts consisting of trade debts, par bonds, and promissory notes;
  • Debt Conversion Committee: responsible for managing various debt conversion options such as debt-for-debt, debt-for-equity, debt-for-export, debt-fornature, and debt-for-development; and
  • Various departments: responsible for processing and effecting loan repayments on behalf of all the other agencies or departments of government listed above.

 

This diffusion in the management of public debt created fundamental problems, including the following:

Operational inefficiency and poor coordination;

  • Inadequate debt data recording system and poor information flow across agencies with consequent inaccurate and incomplete debt records;
  • Extreme difficulty in the verification of creditors’ claims due to conflicting figures from the various bodies handling the debt management function;
  • Complicated and inefficient debt service arrangements, which created protracted payment procedure and often led to penalties that added to the nation’s debt stock;
  • Inadequate manpower and poor incentive systems for the affected personnel, which affected outputs and performance;
  • Lack of consistent well-defined borrowing policies and debt management strategies;

 

The consideration of these myriad problems led government to support the establishment of a relatively autonomous debt management office, which resulted in the formation of the DMO in October 2000. The need for the creation of a separate public debt management office was therefore aimed at achieving the following advantages:

  • Good debt management practices that make positive impact on economic growth and national development, particularly in reducing debt stock and cost of public debt servicing in a manner that saves resources for investment in poverty reduction programs;
  • Prudently raising financing to fund government deficits at affordable costs and manageable risks in the medium- and long-term;
  • Achieving positive impact on overall macroeconomic management, including monetary and fiscal policies;
  • Consciously avoiding debt crisis and achieving an orderly growth and development of the national economy;
  • Improving the nation’s borrowing capacity and its ability to manage debt efficiently in promoting economic growth and national development;
  • Projecting and promoting a good image of Nigeria as a disciplined and organized nation, capable of managing its assets and liabilities;
  • Providing opportunity for professionalism and good practice in nation
    building;

About Us

To manage Nigeria'a debt as an asset for growth,development ,poverty reduction e.t.c

Contact Us

  • NDIC Building (1st Floor)
    Plot 447/448 Constitution Avenue, Central Business District, P.M.B. 532, Garki Abuja, Nigeria.
    Fct-abuja
    Nigeria