Effective Debt Management Strategies for Sustainable Development: Insights from CBN Governor

The Governor of the Central Bank of Nigeria, Olayemi Cardoso, has emphasized the importance of effective debt management in meeting the revenue needs of the country for critical investments in infrastructure, education, healthcare, and other essential services. Speaking at a regional training on annual borrowing plan development, Cardoso highlighted the need for developing a robust Debt Management Strategy (DMS) to ensure the government’s fiscal strategy is transparent and accountable.

Cardoso stressed the significance of building a balanced and resilient debt portfolio to secure necessary financing at the lowest possible cost while managing risks prudently. He also mentioned the importance of strengthening national capacities for debt management to meet funding needs in a cost-effective and risk-conscious manner.

The training, organized by the World Bank, the International Monetary Fund, and the West African Institute for Financial and Economic Management (WAIFEM), aims to provide a holistic understanding of the role of Annual Borrowing Plan (ABP) in public debt management. Participants will learn about the foundational requirements for effective ABP development, including the need for robust data, institutional collaboration, and sound analytical frameworks.

With volatile commodity prices, elevated debt levels, limited fiscal space, fluctuating exchange rates, and rising borrowing costs posing significant threats to debt sustainability and macroeconomic stability in the subregion, sound public debt management strategies are more critical than ever. The training will equip participants with the tools and knowledge needed to navigate these challenges and promote efficient public debt management.

By developing and implementing a strong ABP, Nigeria and other African countries can proactively manage risks, identify vulnerabilities, and adapt to evolving economic landscapes and policy priorities. The training will also introduce participants to the ABP analytical tool through practical, real-world data exercises, ensuring they are well-equipped to handle the complexities of public debt management in the region.