The Federal Executive Council at its meeting on Wednesday approved a new Medium Term Debt Management Strategy for Nigeria for 2020-2023, according to the official website of the Debt Management Office.
The DMO explained that the MTDS was a policy document that provided a guide to the borrowing activities of a government in the medium-term, which is usually four years.
It said: “It is recognised as one of the best practices in public debt management and is recommended by the World Bank and International Monetary Fund (IMF).
“This is to ensure that public debt management is driven by a well-articulated strategy that is structured to meet a country’s broader macroeconomic and public debt management objectives.
“The MTDS, 2020-2023 has been prepared by the DMO, in collaboration with Federal Ministry of Finance, Budget and National Planning and the Central Bank of Nigeria.
“Other collaborating stakeholders are the Budget Office of the Federation, National Bureau of Statistics and the Office of the Accountant-General of the Federation.”
The DMO revealed that Nigeria has had two previous MTDS (2012-2015 and 2016-2019), prior to the current Strategy, which was designed with a consideration of the impact of the COVID-19 pandemic.
It said: “The new Strategy had to be re-worked to reflect the global and local economic impact of the COVID-19 pandemic and it incorporates data from the revised 2020 Appropriation Act and the Medium-Term Expenditure Framework 2021-2023.
“The new MTDS adequately reflects the current economic realities and the projected trends. The preparation of the MTDS usually involves the consideration of alternative funding strategies available to Government.
“It seeks to meet its financing needs, taking into consideration the cost of borrowing and the associated risks, while ensuring debt sustainability in the medium to long-term.”