DMO Denies Buhari Seeking Debt Restructuring, As Claim Threatens Foreign Investors’ Confidence

The Debt Management Office (DMO) has refuted claims that Nigeria plans to restructure its debt, stating that the Finance Minister of the country, Zainab Ahmed, was misquoted.

Bloomberg had reported that Ahmed stated Nigeria will reorganise its debt and extend repayment tenor through hired consultants due to rising debt servicing that have surpassed revenue. 

This statement comes three weeks after President Muhammadu Buhari told world leaders at the 77th session of the United Nations General Assembly that they should offer debt forgiveness. 

Nigeria’s debt had risen to N42.84 trillion as at second quarter of 2022, with foreign total debt amounting to N16.61 trillion, while total domestic debt stock was N26.23 trillion at the end of June. 

Prime Business Africa understands that with report disclosing Nigeria is considering debt restructuring and extending time frame, it could affect the country’s credit rating among international and local creditors. 

Debt restructuring will make it difficult for Nigeria to obtain new loans, as it means the country is unable to meet its current debt obligations. This will affect creditors confidence towards Nigeria in a longrun. 

Reacting to the report of Nigeria restructuring its debt, the Debt Management Office said the government is employing debt management tools to sustain its debt profile, but the finance minister’s statement was misrepresented. 

DMO said, “Over the years, Nigeria’s Debt Management Strategy has always highlighted the need to utilise appropriate debt management tools to streamline the cost and risk profile in the debt portfolio. 

“Toward implementation of these strategies, Nigeria has typically availed itself of concessional loans, the spreading out of debt maturities to avoid bounching, and re-profiling of debt maturities by refinancing short-term debt using long-term debt instruments. 

“All these, non of which constitute debt restructuring, are already being implemented.” 

The debt office assured investors Nigeria will continue to meet its debt obligations, “We want to assure local and international investors and creditors that Nigeria remains committed and will meet all its debt obligations.”