World Bank, WAIFEM Move to Ensure Nigeria’s Debt is At Sustainable Level
The World Bank and West African Institute for Financial and Economic Management (WAIFEM) have announced collaboration between them, which may result in measures that will help keep Nigeria’s local and foreign debt within sustainable levels.
The Debt Management Office (DMO) statistics reveal that the country currently owes local and international creditors a total of $50.91bn (about N7.93tn). As at June 2013, the nation’s external debt stood at $6.92bn (about N1.08tn), while the domestic debt component stood at N6.85tn ($43.99bn).
The move, according to the two international bodies, is to ensure that the nation’s debt burden does not rise to a level where it begins to impede the growth and development of the economy. Nigeria recorded a Government Debt-to-GDP ratio of 18.30 percent in 2012 and economists consider it ideal for governments to keep their debt-to-GDP ratios below 60 per cent.
Director General, WAIFEM, Professor. Akpan Ekpo said recent evaluation of debt management practice in countries in the West African region and some sub-national entities using the Debt Management Performance Assessment (DeMPA) had indicated divergent results in meeting the criteria for sound public debt management practice in many functional areas.
Speaking during the opening ceremony of a one-week WAIFEM, World Bank regional training on DeMPA tool for public auditors, Ekpo recalled that between 2007 and July 2013, both institutions jointly conducted 15 national, sub national DeMPA and reform plan missions in WAIFEM member countries, where Debit Performance Indicators (DPIs) of the 15 countries revealed that public debt management had the worst result.
“It will give Nigeria’s public auditors the opportunity to understand the World Bank debt assessment performance tool to advise our leaders to ensure that our debts are sustainable. This is the first time we are bringing more public auditors to understand debt management. This course has been offered before in other countries where Nigerians attend, and now it is here in Lagos where the World Bank funded more auditors than debt managers,” he said.
Ekpo stated that the DeMPA tool developed by the World Bank had been designed to be user-friendly, which undertakes an assessment of the strengths and weaknesses in government debt management practices.
According to him, the training programme was meant to develop the competencies of the participants in the application of the DeMPA tool as a catalyst to strengthen national and sub-national debt management.
He said at the end of the course, the attendees would have acquired a thorough understanding of the scope and methodology of the DeMPA tool including the inter-linkages between the DPIs.
“The participants will also be trained in the use of evidence-based information for assessing debt management and the associated scoring techniques,” he added.
He said considering the DeMPA missions in WAIFEM constituent countries, coupled with the growing demand by countries to build capacity of auditors in public debt management, the institute found it necessary to give more slots at this course to auditors in order to address the identified capacity gap.
He therefore urged all participants to take advantage of this opportunity to build their capacity by participating actively in the proceedings of the course in order to internalise the DeMPA methodology and hands on exercises.
Earlier, Debt Specialist, World Bank, Mrs. Lilia Razlog, said the partnership between the World Bank and WAIFEM was to further disseminate the knowledge of modern modalities of debt management practices and performances at the federal government level maintaining that this knowledge would improve the audit performances in areas of debt management.
“I understand many of you are coming from the audit entities, so we do hope this is going to help you in your activities which you are envisaging while auditing the investment activities,” she added.
She pointed out that the DeMPA tool, which is designed for accessing the debt management practices and institutions, was developed by the World Bank in consultation with international institutions in order to give the countries the opportunity to identify existing gaps in the area of debt management and promote necessary reforms.
She said the methodology so far has been deployed in more than 60 developing and developed countries in the world. She pointed out that as a result of these activities, the DeMPA evaluation was followed by a series of reforms at the institutional and regulatory level in these countries.