The Federal Government says it is increasing the use of its sovereign guarantees to fund infrastructure in a bid to avoid recourse to borrowing for projects.
To this end, it intends to raise the value of these assurances to 5% of Gross Domestic Product (GDP) from 1.5% that it was in 2019.
Bloomberg quoted the Director-General of the Debt Management Office (DMO), Patience Oniha, as saying that the country can’t keep borrowing on the balance sheet.
She said the administration is looking at guarantees as a way of cutting down the country’s public debt so that investors will be able to raise funding from banks and institutions based on these guarantees.
She said government is on the verge of developing a framework to build capacity to identify, review and evaluate projects for sovereign guarantees.
