Nigeria’s economy is heading for more tough times ahead going by current happenstances at the Debt Management Office, DMO, manned by Ms. Patience Oniha.
There have been red alerts pointing towards a major crisis in the Nigerian economy since Oniha took over about a year ago from Dr. Abraham Nwankwo as the director-general. And despite the several millions of naira allocated to the agency, DMO itself is presently a shadow of its old self due largely to the perceived incompetence of the current DG.
The major worry at the moment is that despite the rising debt profile of the nation, the federal government has been unable to develop a fresh debt management strategy, seven months after the expiration of the Debt Management Office’s (DMO) five-year Third Strategic Plan initiated by Oniha’s predecessor.
Investigations also revealed that DMO is bereft of its own internal working plan, which we learnt, is in the pipeline.
Nigeria’s total public debt increased by 4.52 per cent in the first three months of 2018, the DMO had revealed, adding that the country’s debt increased from N21.73 trillion in December 2017 to N22.71 trillion at the end of the first quarter of 2018.
Financial experts attribute the above trend to lack of administrative skills exhibited by Ms Patience Oniha in handling affairs at the DMO. It is further argued that if no drastic steps are taken by the federal government concerning the Debt Management Office, the Nigerian economy risks a further nosedive in a few months to come.
“She is an analogue administrator who cannot operate in the digital age of debt management,” a financial expert quipped recently. He called for the sack of the director-general to be replaced by a more competent and experienced hand to manage an agency as strategic as the DMO.
As it stands, the prospect of the debt portfolio has become higher as Nigeria has just signed an agreement with France for $475million loan facility for some projects in Lagos, Kano and Ogun States.
The Debt Management Agency is a very critical arm of the federal government as far as debt management is concerned. Section 6(c) of the DMO Establishment Act 2003 states that the agency must, “prepare and implement a plan for the efficient management of Nigerian’s external and domestic debt obligations at sustainable levels compatible with desired economic activities for growth and development; and participate in negotiations aimed at realising those objectives.”
Due to its very critical role in the economy, the Debt Management Office has always operated with a strategic plan since it was establishes on 4th October 2000 to centrally coordinate the management of Nigeria’s debt. Its last strategic plan that expired last December was the third since its establishment.
Though the director-general of DMO had said that Nigeria’s steadily rising debt profile was not a big issue, the International Monetary Fund has expressed deep concerns over Nigeria’s capacity to repay its rising debts. IMF officials recently warned the government that Nigeria has been sliding down towards debt trap.
At a press conference on the sidelines of the World Bank Group Spring Meetings in Washington DC, recently Mrs Catherine Pattillo, Assistant Director, Fiscal Affairs Department of IMF, described Nigeria’s debt to revenue ratio, which she put at 63 percent, as “extremely high.”
According to her, “Borrowing by countries can create benefits if used for investments of high returns. Our evidence suggests that’s not the case in some countries, especially in Nigeria. So rising debt can create the vulnerabilities.”
Chirstine Lagarde, the head of International Monetary Fund corroborated this last month while addressing financial leaders from some developing countries. She said that global debt had soared to 220 per cent of global output, a staggering level that did not bode well for member economies.
In most economy, the debt problem was casting a shadow over future growth prospects, she said.
All efforts to reach Ms. Oniha for her angle proved futile as her mobile number 0802..…….79 was not reachable as at press time.