Nigeria will assist South Sudan in managing its huge debt profile and developing its bonds market, the director-general, Debt Management Officer (DMO), Dr Abraham Nwankwo, has disclosed this when he received a South Sudan delegation on a study tour.
He stressed the need for cooperation among African countries. He also assured the delegation that Nigeria would assist South Sudan to set up its own DMO. “This visit has opened a new door for economic cooperation between Nigeria and Sudan to share our knowledge and experience and also to learn from each other. We are happy that rather than going to European or industrialised Asian countries, you came to Nigeria. This shows the spirit of African solidarity” he said.
A member of the delegation and the director-general, Directorate of Macroeconomic Planning, South Sudan, Mr Philip Boldit, said that currently there are no records to establish the debt of his country. “The debt profile of South Sudan was incurred locally through the commercial banks and Central Bank. This is because we could not borrow internationally due to the insecurity in the country.
Meanwhile DMO has cautioned the Federal Government against brokering new debt deals, given the approaching debt service threshold. The country sustainable debt threshold, arrived at with self-developed country-specific model, showed that as at December 2014, debt service-to-revenue ratio had hit 25.2, against the maximum of 28.
The director general noted that the agency developed its own country-specific solvency and liquidity ratios for public debt. According to him, although, the ratios from the general thresholds indicate that the country debt remains sustainable from the country-specific solvency and liquidity thresholds, it is critical to note that the gaps are closing in on the country.
It however, advised that the country should rather deepen strategies and efforts in generating more revenues from the existing sources, as well as opening new sources.
He said DMO noted that it would be illusory to follow the global debt threshold of 56 per cent for countries ranked alongside Nigeria, when its actual revenue is equal to the growth in the Gross Domestic Product (GDP).