2012年-世界发展银行全球_Debt_Management_Performance_Assessment___Nigeria_26页_1mb

Debt Management Performance Assessment (DeMPA) Summary - Nigeria

Executive Summary

A World Bank mission conducted a comprehensive assessment of Nigeria's debt management operations using the Debt Management Performance Assessment (DeMPA) tool in March 2012. The assessment involved the Debt Management Office (DMO), government officials from various departments, the Central Bank of Nigeria (CBN), and stakeholders in the government securities market. The 2012 DeMPA was the second such assessment in Nigeria, following the 2008 one, and aimed to evaluate progress in debt management reforms.

Key areas with high scores include the managerial set-up, evaluation of debt management operations, and domestic and external borrowing practices. These areas showed improvements compared to the 2008 assessment. Notably, there were substantial enhancements in operational risk management, particularly in procedures manuals and data security. However, a few areas remained problematic, such as the quality of the debt management strategy and the lack of external auditing of debt management activities.

Core Content of the Assessment

The DeMPA tool evaluates 15 debt performance indicators (DPIs) based on 35 dimensions of sovereign debt management activities. The assessment is designed to measure the effectiveness of debt management practices and identify areas needing improvement. Each DPI is scored on a scale of A, B, C, or D, with A indicating sound practice, B an intermediate score, C meeting minimum requirements, and D indicating failure to meet the minimum requirements.

The assessment focuses on central government debt management and related functions such as loan guarantees, on-lending, and cash flow forecasting. It does not cover the management of implicit contingent liabilities or the debt of State-Owned Enterprises (SOEs), unless these are guaranteed by the central government.

Main Findings and Key Indicators

Governance and Strategy Development

• DPI-1: Legal Framework

  • Score: C
  • The legal framework is clear on borrowing and guarantee issuance but lacks specific debt management objectives. The DMO Act and Fiscal Responsibility Act provide authorization for borrowing and guarantees but do not define clear strategies or objectives.

• DPI-2: Managerial Structure

  • Score: A
  • The DMO has a well-defined managerial structure, with clear roles and responsibilities. It is organized into front, middle, and back offices, and includes departments that handle cross-cutting issues.

• DPI-3: Debt Management Strategy

  • Score: D
  • The debt management strategy is not comprehensive enough. It lacks specific targets for interest rate, refinancing, and exchange rate risk. The strategy is being updated to address these gaps.

• DPI-4: Evaluation of Debt Management Operations

  • Score: A
  • The DMO publishes an annual report that includes debt management activities, outstanding debt stock, and evaluations against stated objectives. The report is submitted to the Supervisory Board and the National Assembly.

Coordination with Macroeconomic Policies

• DPI-6: Fiscal Policy

  • Score: C
  • The DMO provides debt-service forecasts, but the quality and availability of macroeconomic information and Debt Sustainability Analysis (DSA) data are not fully aligned with international standards.

• DPI-7: Monetary Policy

  • Score: B
  • There is some clarity in the separation between debt management and monetary policy operations, but the regularity of information sharing is strong, and access to central bank financing is limited.

Borrowing and Related Financing Activities

• DPI-8: Domestic Borrowing

  • Score: A
  • The DMO has well-established market-based mechanisms and documented procedures for domestic borrowing. There is a borrowing plan in place, and the CBN collaborates in the auction process.

• DPI-9: External Borrowing

  • Score: C
  • External borrowing procedures are not well-documented, and there is no clear strategy for managing foreign currency exposure. Legal advisers are involved in the process, which is a positive aspect.

• DPI-10: Loan Guarantees and On-lending

  • Score: D
  • Documented policies and procedures for loan guarantees are lacking. On-lending procedures are well-documented, but the lack of formal procedures for guarantees results in a lower score.

Cash Flow Forecasting and Cash Balance Management

• DPI-11: Cash Flow Forecasting and Cash Balance Management
  • Score: D
  • The DMO fails to meet the minimum requirements for effective cash flow forecasting and management, indicating a need for improvement in this area.

Operational Risk Management

• DPI-12: Debt Administration and Data Security

  • Score: C
  • The DMO has documented procedures for debt service and data recording. Data security measures are robust, with regular back-ups and access control.

• DPI-13: Segregation of Duties and Risk Management

  • Score: B
  • There is effective segregation of duties and business continuity plans. However, staff capacity and human resource management are at a minimum level.

Debt Records and Reporting

• DPI-14: Debt Records

  • Score: C
  • Debt records are partially complete and timely, but there is room for improvement in the completeness and timeliness of debt data.

• DPI-15: Debt Statistical Bulletin

  • Score: C
  • The debt statistical bulletin is of acceptable quality but not timely enough, and there is no comprehensive reporting on public sector debt.

Key Information and Recommendations

• Nigeria has made progress in debt management, particularly in risk management and reporting procedures.
• The legal framework is clear on borrowing and guarantees but lacks specific debt management objectives.
• The DMO has a well-structured managerial framework and is actively involved in the preparation of a new medium-term debt management strategy.
• There is a need for improvement in areas such as the quality of the debt management strategy, external auditing, and cash flow forecasting.
• The DMO collaborates closely with the CBN and other agencies, which contributes to the effectiveness of its operations.
• The assessment will feed into the broader Public Expenditure and Financial Accountability (PEFA) framework and the upcoming PEFA assessment.