Debt Management Office debunks issuance of dollar treasury bills

The Debt Management Office (DMO) has faulted claims that the Nigerian government was issuing dollar denominated treasury bills.

The Director General of DMO, Mrs Patience Oniha, cleared the air at a meeting with editors from different media houses in Lagos.

Mrs Oniha stated that the Nigerian government was not issuing any dollar treasury bill but rather working assiduously to reduce the incidence of the nation’s debt.

The newly appointed DG stressed that government was planning to further reduce the cost of borrowing by taking a three billion dollar loan and using the proceeds to repay some of the outstanding 3.7 trillion naira treasury bills already issued.

“The Federal Government has a treasury bill stock of about 3.7 trillion naira outstanding, I mean the treasury bills that we have issued; so what we are trying to do as part of public debt management to reduce the cost of borrowing is to try and reduce that stock of treasury bills because it is expensive at 18 percent apart from the short tenor of maximum of 364 days, so what we are doing is not issuing dollar treasury bills, we are saying we will borrow three billion in US dollars and use the proceeds to repay some of our treasury bills that are outstanding, so they will be instruments of longer tenor and at lower costs,” she added.

She maintained that the move was not a new borrowing, noting that it would not in any way increase the nation’s debt profile.

“When treasury bills are issued, the auction notice is in the public domain, so is the result; treasury bills are issued for a tenor of 364 days maximum and the discount rate is about 18 percent to government, when you compare that with the rate of six to seven percent of borrowing in the international market, you will realise straightaway that there is a huge savings of 11 to 12 percent, so that is what we are trying to take advantage of, it is not a new borrowing and it is not increasing our debt stock, it s simply going to convert some of our naira debt into US dollars,” according to Mrs Oniha.

Media partnership

Mrs Oniha, who was the Head of the Efficiency unit under the Federal Ministry of Finance until her latest appointment, also called for collaboration from the media by sensitising the citizenry through proper breakdown of figures and technical terms.

During an interactive session with the DG and other officials of the DMO, some of the editors present spoke in unison as they called on the Debt Management Office to always be ready to make necessary information available to the media whenever the need arose.

An Assistant Director of News, Voice of Nigeria, Dr Qasim Akinreti was of the view that the DMO should hold ‘full disclosure’ in high esteem.