The Debt Management Office (DMO) has debunked claims that it was not able to account for the N2.2 trillion allocation in the 2018 Appropriation Act.
The DMO in a statement on Tuesday said the allegation, as contained in media reports following the agency’s appearance at the hearing of the Public Accounts Committee of the House of Representatives last Friday, is both false and misleading.
According to the Office, the amount of N2.2 trillion was not available as the DMO’s total allocation since N2.1 trillion was specifically meant for servicing Nigeria’s domestic and external debt.
“This explains why the Debt Service is expressly stated as a separate line item in the annual Appropriation Acts, while the DMO’s Expenditure is also stated separately.
“The media outlets made the statement following the DMO’s appearance at the hearing of the Public Accounts Committee of the House of Representatives on Friday, February 26, 2021.
“At the session, the Committee enquired about the utilisation of the N2.2 trillion provided in the 2018 Appropriation Act; of which N2.1 trillion was allocated for Debt Service and the DMO’s appropriation of N721, 251,798.00, making it N2.2 trillion,” the DMO said.
It stressed that the provisions in the Annual Appropriation Acts for Debt Service, including the 2018 Appropriation Act, are dedicated for Debt Service payments only; that is, for the repayment of Principal, Interest and Other Charges for both Domestic and External Debt.
“Indeed, the funds for Debt Service are never released to the DMO for spending, rather, in line with the mandate of the Office of the Accountant-General of the Federation (OAGF), the funds are domiciled with the OAGF, who on the advice of the DMO, effects payments directly to the creditors as at when due.
“Such creditors include multilateral and bilateral lenders like the World Bank, African Development Bank, Exim Bank of China, investors in Nigeria’s Eurobonds, as well as, investors in securities issued in the domestic market such as FGN Bonds, SUKUK, Green Bonds and Nigerian Treasury Bills,” DMO explained.
It further noted that servicing of the public debt is absolutely necessary to ensure that Nigeria remains credit-worthy and retains or improves on its sovereign rating which ultimately, will support growth and development.