By Yakubu LAAH InvestAdvocate
Lagos (INVESTADVOCATE)-Nigeria and the United Kingdom (UK) will on Friday launch a report on the success story as regards their public debt management partnership.
InvestAdvocate gathered that the partnership between the Nigerian government and the United Kingdom’s Department for International Development (DFID) in the management of Nigeria’s public debt has yielded positive results, according to a review of partnership.
In October 2000, the DFID assisted Nigeria to establish the Debt Management Office (DMO) which has been a success story 30 years down the line.
Nigeria’s Vice President Namadi Sambo will launch the report on Friday in Abuja Nigeria’s capital.
According to the report, the technical assistance from DFID has enabled Nigeria to professionalise the management of its public debt.
A review of the report has showed that the DFID and Nigeria’s Government partnership on public debt management has made it possible for the DMO to establish Nigeria’s debt figure, and in 2005 to successfully negotiate its external debt down from $35 billion to $5 billion; indicating a 600 percent (600%) reduction in Nigeria’s external debt burden.
The review further showed that other successes have been the extension of debt management systems from the national to sub-national levels of government and a reasonably well-functioning domestic government bond market enabling Nigeria to raise money from capital markets for its national development.
Andrew Pocock, British High Commissioner to Nigeria, speaking on the forthcoming report said partnering with countries like Nigeria to pursue self-financed exits from poverty is a key part of the UK government’s development approach. ‘’Helping Nigeria improve its debt management is an important achievement on the road to macro-economic stability, economic growth and job creation,” Pocock said.
Nigeria’s public debt management until year 2000 was largely ineffective, creating inadequate debt records, difficult means in the verification of debt claims and conflicting figures from the various bodies handling the debt management function.
Also, there was inadequate human capital and poor incentive systems for staff, which gave rise to corruption and thus, affected outputs and performance.
Apart from these, the nation was unable to service its debt and interest payment, leading to a debt crisis that pushed the country’s figure from less than $1 billion in 1970 to about $28.27 billion in 2000.
In 1998-1999, Nigeria entered into an agreement with the UK for ad hoc technical assistance through the DFID with a focus to establish an effective public debt management system.
However, the DFID, as the main partner supported the debt management revival in Nigeria between 1998 and 2013 under three main phases.
The first phase was in 1998 to 2002 which was to establish a system for debt management.
The Second phase-2003 to 2009 was focused on obtaining debt relief so as to promote economic growth and address the rising poverty in Nigeria.
And the third phase- 2009 to 2013 gave priority to national debt policy, and extended debt management systems from national to sub-nation level of government.
