DMO says Nigerian roads financed with Sukuk not repaying debt as planned

The Debt Management Office (DMO) has decried the country’s debt service to revenue ratio, describing it as a major issue of concern.

Patience Oniha, the Director-General of DMO, said this in Abuja on Thursday at the fifth Budget Seminar (webinar) organised by the Securities and Exchange Commission (SEC).

The theme of the budget seminar was, “Financing Nigeria’s Budget and Infrastructure Deficit through the Capital Market.”

Oniha stressed the need for infrastructure built with borrowed funds to generate revenue to service the debts.

According to her, “We have done the Sukuk, for instance, but the government is the one servicing the debt of those Sukuk.

“They (the debts) are not being serviced with revenue from those sources (infrastructure).

“I think that when we are talking about those innovations like revenue, bonds and all that, we should be talking about policies to ensure that the projects that we financed generate revenue,’’ she explained.

The government has tied the Sukuk bond to road infrastructure projects since its launch in 2017. Some of the roads earmarked for the hundreds of billions realised are Ibadan-Ilorin Road, Kolo-Otuoke- Bayelsa-Palm Road, Enugu-Port Harcourt Expressway, Kaduna Eastern Bypass, Kano-Maiduguri Road, and Damaturu-Potiskum Road.

Afolabi Olowookere, the Head of Economic Research and Policy Management Division of SEC, said the current system where the government appeared to be the major financier of infrastructure projects was unsustainable.

Olowookere suggested that an adequate cost recovery system be adopted for any infrastructure to be revenue-generating.

“One major source for financing infrastructure is Public-Private Partnership. Government must formulate policies and incentivise the development of domestic public debt markets,’’ he said.

Oscar Onyema, the Chief Executive Officer of the Nigerian Stock Exchange (NSE), said the exchange was ready to support economic development in the country through infrastructural products.

Onyema said the NSE would work with supply and demand side to create the needed environment at the exchange for infrastructure development.