The International Monetary Fund (IMF) on Wednesday raised concern over the risk of rollovers for Nigerian debt and potential challenge in meeting the needs for refinancing.
Rollover risk is commonly faced by countries and companies when a loan or other debt obligation (like a bond) is about to mature and needs to be converted, or rolled over, into new debt.
Tobias Adrian, financial counsellor and director of the monetary and capital markets department, IMF, who unveiled the Global Financial Stability Report (GFSR) titled ‘Vulnerabilities in a Maturing Credit Cycle’, at the ongoing World Bank/IMF Spring meetings in Washington DC, admitted that Nigeria has been borrowing in international market with rising rollover risk.
“But we worry – so on the one hand, that is very good because it allows Nigeria to invest more, but on the other hand, we do worry about rollover risks going forward,” Adrian said.
He said at the moment, funding conditions in economies such as Nigeria and other sub-Saharan African countries are very favourable but that might change at some point.
“There a risk of whether these needs for refinancing can be met in the future,” Adrian said.
The total Public Debt West Africa’s biggest oil producer stood at N24.387 trillion or USD79.437 billion as at December 31, 2018 representing a year-on-year growth of 12.25 percent, data from the Debt Management Office (DMO) shows.
HOPE MOSES ACHIKE, Washington D.C
