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The Debt Management Office (DMO) has declared that N2. 2 trillion, which could not be traced by the National Assembly is not missing.
The DMO in a statement yesterday said: “The provisions in the Annual Appropriation Acts for Debt Service, including the 2018 Appropriation Act, are dedicated for Debt Service payments only”.
This item in the yearly budget, the DMO explained, “is for the repayment of Principal, Interest and Other Charges for both Domestic and External Debt.”
The DMO added: “Funds for Debt Service are never released to the DMO for spending; rather, in line with the mandate of the Office of the Accountant-General of the Federation (OAGF), the funds are domiciled with the OAGF, who, on the advice of the DMO, effects payments directly to the creditors as at when due.”
The allocation for debt servicing the DMO said is paid to creditors which include multilateral and bilateral lenders like the World Bank, African Development Bank, Exim Bank of China, investors in Nigeria’s Eurobonds.
Others are, “investors in securities issued in the domestic market such as FGN Bonds, SUKUK, Green Bonds and Nigerian Treasury Bills”.
The servicing of the public debt the DMO states “is absolutely necessary to ensure that Nigeria remains credit-worthy and retains or improves on its sovereign rating which ultimately, will support growth and development”.
This reason and for transparency purposes, the DMO noted is why “Debt Service is expressly provided as a line item in the Annual Appropriation Acts”.
It was alleged recently that the Debt Management Office (DMO) was unable to account for the N2.2 trillion allocation to the DMO in the 2018 Appropriation Act.
The DMO had appeared before the Public Accounts Committee of the House of Representatives. The Committee had enquired about the utilisation of the N2.2 trillion provided in the 2018 Appropriation Act; of which N2.1 trillion was allocated for Debt Service and the DMO’s appropriation of N721,251,798.00, making it N2.2 trillion.
The DMO explained to the Public Accounts Committee that the amount of N2.2 trillion was not available as the DMO’s total allocation since N2.1 trillion was specifically meant for servicing of Nigeria’s Domestic and External Debt.
This explains why the Debt Service is expressly stated as a separate line item in the annual Appropriation Acts, while the DMO’s Expenditure is also stated separately.