Finance minister’s ‘debt restructuring’ comment taken out of context — DMO
The Debt Management Office (DMO) has clarified that a statement on seeking an extension of Nigeria’s loan payment by Zainab Ahmed, the minister of finance, budget and national planning, was taken out of context.
Nigeria’s debt manager issued a press statement on Thursday following the negative impact of the minister’s misrepresented statement during her recent interview on Bloomberg TV on the Eurobond financial markets and the fears it had created in the hearts of the country’s international investors and external creditors.
“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,” the statement read.
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“Towards implementation of these strategies, Nigeria has typically availed itself of concessional loans; the spreading out of debt maturities to avoid bunching; and re-profiling of the debt maturities by refinancing short-term debt using long-term debt instruments.
“All of these, none of which constitute debt restructuring, are already being implemented.”
The debt manager added that it’s current moves to ensure agreements on loan repayment are met.
“The Nigerian government is also looking forward to exploring other appropriate debt liability management options, such as bond buyback and bond exchanges,” DMO stated.
It maintained that the Federal Government was exploring more cost-effective ways to manage the nation’s debt liabilities and was not seeking an extension.
“We want to assure local and international investors and creditors that Nigeria remains committed and will meet all its debt obligations,” DMO said.
The office asked international investors and creditors to remain calm and understand that the country does not in any way seek to violate the terms of its agreement.
Earlier in the day, Nigeria’s Eurobonds fell in price, trading at 56.79 cents on the dollar at midday. Those are bonds having 2047 as their expiry date, having fallen from Tuesday’s 58.37 cents. Those due in 2049 and 2051 dropped as well, according to Bloomberg data.
Further investigation by a Bloomberg index which keeps tabs on government debt instruments from emerging markets showed that the country offered half a dozen of its bonds at 1,000 basis points or more than U.S. Treasuries, a level often deemed to be distressed.