CBN governor calls for stronger budget processes
The governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, has called for stronger budgetary processes and accounting systems to improve transparency and accountability in public financial management.
Speaking at the Joint World Bank, IMF, and West African Institute for Financial and Economic Management (WAIFEM) regional training on the Annual Borrowing Plan (ABP) in Abuja, Cardoso, who was represented by Dr Ladies Bala-Keffi highlighted the importance of a comprehensive approach to debt management.
Cardoso noted that developing effective Debt Management Strategies (DMS) and Annual Borrowing Plans (ABP) requires a coordinated institutional framework and a stable macroeconomic environment. This means that all parts of the government need to work together to manage public debt effectively, ensuring that policies are aligned and stable.
The CBN governor also stressed the importance of investing in the training and development of debt management professionals.
By continuously providing them with the necessary training, mentorship, and technical assistance, the government can ensure that these professionals are well-equipped to handle complex debt management tasks.
Regularly disclosing debt portfolios and borrowing activities is crucial for building trust with investors, creditors, and the public.
Cardoso pointed out that transparency in these areas can help reduce borrowing costs and promote more efficient debt management.
Dr. Baba Yusuf Musa, Director General of WAIFEM, represented by Yakubu Aliyu highlighted the unique challenges faced by debt managers in the West African sub-region.
These include volatile commodity prices, high debt levels, limited fiscal space, fluctuating exchange rates, and rising borrowing costs. Such challenges threaten debt sustainability and economic stability, affecting the growth and well-being of citizens.
Dr. Musa explained that while many countries in the region develop Medium-Term Debt Strategies (MTDS), implementing these strategies effectively can be difficult.
The training on Annual Borrowing Plan (ABP) Development is designed to help overcome these challenges by providing a structured framework for operationalizing the MTDS on an annual basis.
This ensures that strategic debt management objectives are translated into specific borrowing activities and targets for the fiscal year.
The ABP aligns with government budgetary and fiscal policy objectives, determining the sources of financing, types of instruments, and maturities while considering market conditions.
The Issuance Plan, which operationalizes the ABP, outlines the timing and details of each debt issuance, ensuring a steady and predictable supply of funds to meet the government’s financial obligations.
Continuous monitoring and evaluation of the ABP process are essential to adapt to changing economic conditions and policy priorities.
This promotes efficient public debt management, ensuring that the government’s financial needs are met in a sustainable manner.
This focus on improving budgetary and debt management practices is expected to enhance transparency, accountability, and overall economic stability in Nigeria and the West African region.
