Strengthening national capacities for debt management crucial – Cardoso

The Central Bank of Nigeria (CBN) Governor, Mr. Olayemi Cardoso has said Strengthening national capacities for debt management is crucial for meeting the government’s funding needs both now and in the future in a cost-effective and risk-conscious manner.

Cardoso made the call while delivering a keynote address at the regional training on Annual Borrowing Plan (ABP) development jointly organized by the World Bank, the International Monetary Fund (IMF) and West African Institute for Financial and Economic Management (WAIFEM) in Abuja, yesterday.

Cardoso said: “In today’s interconnected world. Effective debt management is not just a technical exercise but a strategic necessity. It ensures that governments can finance critical investments in infrastructure, education, healthcare, and other essential services without jeopardizing the well-being of future generations.

He said West African Countries must prioritize building a balanced and resilient debt portfolio.

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He argues that at the core of sound public debt management is the Debt Management Strategy (DMS) – a formal plan devised by the government to achieve its debt management objectives. “These objectives typically include securing necessary financing at the lowest possible cost while prudently managing risk. Additionally, developing the domestic debt market may also be a key objective in certain instances.”

In his welcome remarks, Director-General WAIFEM, Dr. Baba Yusuf Musa said debt managers grapple with unique challenges, including volatile commodity prices, elevated debt levels, limited fiscal space, fluctuating exchange rates, and rising borrowing costs.

He said: “These challenges pose significant threats to debt sustainability, macroeconomic stability, growth prospects, and, ultimately, the well-being of the citizens. In this context, sound public debt management strategies and well-articulated borrowing plans are more critical than ever.”

He said this particular training on Annual Borrowing Plan (ABP) Development is designed to address this issue by providing a structured framework for operationalising the MTDS annually.