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Nigeria’s Total Debt Hits N20trn

The Debt Management Office (DMO) has declared that Nigeria’s total debt stock has hit N20.37 trillion.

In a statement issued in Abuja Tuesday, the DMO said the total public debt stock comprising the federal government, the 36 states and the Federal Capital Territory stood at N20.37 trillion as of September 30.

This shows a marginal increase of 3.6 per cent from the N19.64trillion as of June 30.

A breakdown of the debt stock shows that domestic debt accounted for 76.96 per cent, while external debt accounted for 23.04 per cent.

Specifically, domestic debt stock stood at N15.68tn, which is an increase of 4.1 per cent compared to N15.03tn as of June 30.  On the other hand, external debt stock stood at N4.69tn, a marginal rise of 1.9 per cent above the N4.6tn as of June 30.

According to DMO, the debt data lend credence to government’s claims that the public debt stock was skewed in favour of domestic debt, which is partly responsible for the high debt service figures.

It is against this background that analysts have commended the government on its strategy of introducing lower cost external debt into the debt stock in order to reduce debt service costs.

For this purpose, the government is making arrangements to raise external funds of $5.5 billion.

DMO said the amount, which comprises of $2.5 billion in new borrowing to partly finance the N2.32 trillion deficit in the 2017 Appropriation Act and $3 billion to repay maturing domestic debt is expected to achieve a reduction in interest costs of about N75 billion and N91billion respectively when compared to the interest cost of borrowing in Naira in the domestic market.

It also noted that the strategy will also contribute to attaining the target ratio of 60:40 between domestic and external debt.

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