Analysing Nigeria's debt profile

Nigeria's government is gearing up to launch a 20-billion-naira green bond by the end of March and is also planning to raise a debut 300-million-diaspora bond abroad. These developments come against the backdrop of a current debt profile exceeding $57 billion. Abraham Wanquo, Director General of the Debt Management Office, recently shed light on the country's debt profile and financial plans for 2017 in an exclusive interview with CNBC Africa. Wanquo discussed Nigeria's borrowing strategy, emphasizing that the additional 500 million USD diaspora bond requested by Acting President Yemi Osinbajo is part of the plan that was approved for the 2016 fiscal year. This move follows the successful issuance of a 1 billion USD Eurobond, with 500 million USD still available from that source. Wanquo clarified that the government's decision to pursue the 500 million USD bond was influenced by the success of the previous Eurobond offering. The aim is to capitalize on the momentum and tap into available funds to bolster Nigeria's financial position. Another significant development is the introduction of a retail savings bond to engage everyday Nigerians in investment opportunities. The government aims to democratize the capital markets and enable individuals across income levels to participate in economic growth. This retail bond will provide a new avenue for ordinary citizens to invest and support the country's development. Wanquo also highlighted the government's strategy to shift more of its debt to longer-tenor instruments, aiming to reduce reliance on short-term borrowing and take advantage of lower borrowing costs externally. The proposed mix involves increasing external borrowing to optimize costs and create space for private sector borrowing domestically. When questioned about Nigeria's debt forgiveness prospects, Wanquo underscored the country's resilience amidst global economic challenges. He emphasized that while Nigeria faces obstacles, the economy remains robust, supported by a strong resource base and purposeful government. Wanquo dismissed the idea of seeking debt forgiveness, asserting that Nigeria is capable of navigating its financial obligations without external intervention. The conversation also touched on the IMF, with Wanquo emphasizing that Nigeria's focus is on leveraging its own resources and implementing a strategic economic plan to drive growth and manage debt effectively. In conclusion, as Nigeria forges ahead with its financial initiatives, the nation's debt landscape is a key focal point. The government's proactive approach to debt management and financial strategy sets the stage for sustained economic development and resilience in the face of global uncertainties.