The Nigerian Debt Management Office (DMO) contravened the law when its borrowings exceeded the set limit which is equivalent to $2.2 billion, Adetilewa Adebajo, an international financial markets expert has reportedly said. Adebajo also suggested that the Central Bank of Nigeria governor Godwin Emefiele should be probed for his role in allowing the DMO’s borrowings to balloon to more than $48.8 billion.
DMO Accused of Contravening the Fiscal Responsibility Act
According to Adetilewa Adebajo, an international financial markets expert, Nigeria’s Debt Management Office (DMO) violated the law when its borrowings exceeded $2.2 billion (1 trillion nairas). In remarks reportedly made during an interview with Arise TV, Adebajo argued that the DMO can be sued for contravening both the Central Bank of Nigeria (CBN) Act and the Fiscal Responsibility Act.
Although the DMO is allowed to borrow domestically without a mandate from the country’s National Assembly, the agency’s borrowings which now exceed $48.8 billion mean it has violated the law.
“The DMO is not mandated to go to the National Assembly before they borrow abroad, but the Ways and Means give them the right. But it is not supposed to exceed N1 trillion. It is at N22 trillion [$48.8 billion], which indicates that they have exceeded the limit. This is where the illegality comes in,” Adebajo reportedly said.
Expert Slates Nigeria’s Planned Securitization of Its Debt
Meanwhile, a different report quotes Adebajo who said the Nigerian central bank governor Godwin Emefiele should be probed for his role in allowing the DMO to exceed its borrowing limits. Concerning the Nigerian government’s plan to securitize its debt for 40 years, Adebajo insisted that such an would be illegal.
“They want to send the securitisation proposal to the ways and means committee of the National Assembly, under which law? There is no law in Nigeria that states that you take ways and means financing to the National Assembly for approval,” the expert reportedly said.
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Terence Zimwara is a Zimbabwe award-winning journalist, author and writer. He has written extensively about the economic troubles of some African countries as well as how digital currencies can provide Africans with an escape route.
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