The first in the Public Finance Management Suite, the Debt Sustainability Analysis tool launch set the tone for the inauguration of other tools for competent management of public finance. According to the National Programme Manager of DFID’s Partnership to Engage, Reform and Learn, (PERL) Mr Ifeanyi Peters Ugwuoke, some contents of the DSA tool are pulled from a predecessor programme, the State Partnership for Accountability, Responsiveness and Capability, and firmed up by PERL to enable states in Nigeria to proficiently analyse their debt burdens, especially in the COVID-19 era of budget reorientation. The launch took place on 28th May 2020 through a webinar which had in attendance top government officials and academics from local and international institutions.

PERL provides technical assistance to Federal and State Government partners, including citizens, to improve governance and service delivery in Nigeria. In supporting these processes and reforms, PERL adapts locally-led approaches that are redefining and changing the scope of governance in Nigeria. Tools and templates have been developed for key areas of governance reform interventions, including policy, planning and budgeting, revenue and local governance.

In his keynote address during the webinar, the Director, Policy, Strategy and Risk Management Department Mr Joe Ugoala, appreciated the relationship between the Debt Management Office (DMO) in Nigeria and the UK Department for International Relations (DFID), which has helped the office to perform and remain accountable. He informed participants that since 2007, DFID played a critical role in greasing this relationship and enabling the DMO to produce an up-to-date record of all external and domestic debts of each state, in addition to the federal debt profile. He announced that the DMO has a tab on the position of indebtedness across Nigeria, authenticating all publications on the subject.

The debt profile analysis or debt sustainability analysis describes the state and nature of indebtedness of the government, as well as the long-term sustainability of these debts, in view of planned future capital expenditures. It aims to match the borrowing needs of the government with their current and future ability to repay. The tool allows states to compile and model their debt position to give both a retrospective view of public sector debt dynamics (drawdown and servicing, and stock) as well as scenario-based analysis of future public sector debt dynamics under different macro-fiscal assumptions. Such analysis should inform short- and long-term decision-making in the fiscal policy and budget process.

PERL’s Consultant, an international debt management expert, Dr Adam Aikuta led the technical session, introducing the DSA tool, having been developed by the World Bank and adaptable for diverse environments. As explained by Dr Aikuta, the tool has numerous benefits for states including:

• Allowing for simple data entry and forecasting as it has been developed based on lessons from various technical assistance interventions across states in Nigeria;
• Reducing time for actual analysis once data is entered correctly; • Understanding the set of tools which comprises the guidance on debt liquidity and solvency ratios that can guide states in their decision-making processes;
• Macro-fiscal scenarios proposed, which are based on the current risks facing Nigerian states;
• Greater support for better informed fiscal decision making, improving value for money in terms of utilization of public resources.

In his concluding remarks, the Director General for DMO encouraged all states to use the tool maximally. He appreciated PERL and DFID for continued commitment to PFM reforms and holistic approach of engaging all states and the federal government. He reiterated that, just as the strength of a chain is determined by the weakest link, the no-state-left-behind approach must be utilized to manage debts and ensure accountability and management of public finances.

Ben Akabueze, the Director General, Budget Office of the Federation who joined the webinar despite his very busy schedule appreciated PERL’s support and commitment to the PFM Reform Agenda in the country and for simplifying governance tools.