Central Bank of Nigeria (CBN) and Nigeria’s Debt Management Strategy: A Comprehensive Analysis

The Central Bank of Nigeria (CBN) has been at the forefront of the country’s debt management strategy, emphasizing the importance of transparency and accountability in borrowing practices. With Nigeria’s debt reaching ₦121.67 trillion ($91.46 billion) in March 2024, the CBN Governor, Olayemi Cardoso, has taken a firm stance against reckless borrowing.

Cardoso has highlighted the need for a balanced and resilient debt portfolio, emphasizing the importance of building trust with investors, creditors, and the public through routine disclosure of debt information. He has also called for continuous training and capacity development for debt management professionals to excel in their roles.

The recent increase in Nigeria’s debt has raised concerns about the country’s fiscal discipline and over-reliance on borrowings for public spending. President Bola Tinubu has reiterated his commitment to reducing Nigeria’s borrowings and breaking the cycle of debt servicing that burdens the government’s limited revenues.

As Nigeria grapples with its debt crisis, the CBN’s efforts to promote effective debt management and strengthen national capacities for debt management are crucial. By prioritizing sound public debt management practices, Nigeria can meet its funding needs in a cost-effective and risk-conscious manner, both now and in the future.

It is now up to the fiscal authorities to heed the voice of reason and implement the necessary changes to ensure a sustainable and prosperous future for Nigeria. The CBN’s focus on transparency, accountability, and strategic debt management is essential for building a strong foundation for economic growth and development in the country.