Public Debt Management and Macroeconomic Stability in Nigeria

Public debt management during the post-debt relief period has neither been effective nor efficient. This is because of conflicting interests between the Debt Management office (DMO) and Fiscal Responsibility Commission (FRC). However a clear legal framework is necessary for making appropriate institutional arrangements for public borrowings. This should cover legislation for borrowings by the government for its own use or on-lending. The Central Bank of Nigeria (CBN) acts as an agent of government for external borrowing. The legislation has to be supported by regulations and procedures which defines the explicit roles of the different agencies. DMO and FRC involved in loan operations at all stages of the “loan cycle” for each category of borrower. Legislation covering the issue of government guarantees by the Federal Ministry of Finance (MOF) on behalf of the government and criteria and procedures for their approval and monitoring are also required.