Figures rolled out by the Debt Management Office (DMO) have shown that the country’s total debt stock as of the end of September this year stood at N20.37tn.
However, about N8tn debt grew within last two years of President Muhammadu Buhari administration as before handover in May 2015, Nigeria’s total debt profile stood at N12.36tn.
Analysts’ say the rise is about 64.81 in the period.
Though DMO failed to give details of the federal and state governments’ components of the total debt commitment, indications are rife that the bulk of the debt usually belongs to the Federal Government.
As of 2015, the external loan component of the country’s total debt stood at N2.09tn. However, as of September 30, 2017, the external debt component stood at N4.60tn. This means that the external debt component rose by N2.6tn or 124.4 per cent.
The domestic debt component of the total debt, on the other hand, rose from N10.27tn as of September 2015 to N15.68tn the same time this year.
This means that within the two-year period, the domestic debt rose by N5.41tn. In percentage terms, the domestic debt increased by 52.68 per cent.
The external debt component of the total debt increased by a higher proportion within the period, thus providing more ground why the Federal Government’s move to take more foreign loans as against the acquisition of more costly local debts.
Also, the debt statistics as of September 2017 show that the domestic debt, with its high cost of servicing, still dominates the country’s borrowing pattern.
Only earlier this week, the Senate gave its approval to the $5.5bn loan request which government claimed it will use to refinance some local debts that are matured and another $2.5bn to finance the deficit in the 2017 budget.
DMO in a statement said the Federal Government would save N91bn on local debt servicing if it secured the $3bn to refinance the local debts, adding that government would still save N75bn in debt servicing if it got $2.5bn from foreign sources to finance the gap in the 2017 budget rather than from local sources.
In total, about N166bn savings in debt servicing through external financing will be achieved as against the current idea of domestic financing.
DMO argued that “The total public debt stock, comprising the Federal Government, states and Federal Capital Territory’s, stood at N20.37tn as of September 30, showing a marginal increase of 3.6 per cent from the N19.634tn 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, the domestic debt stock was N15.68tn, which is an increase of 4.1 per cent compared to N15.03tn as of June 30. On the other hand, the external debt stock stood at N4.69tn, a marginal rise of 1.9 per cent above the N4.6tn figure as of June 30.
“These debt data lend credence to the government’s claims that the public debt stock is skewed in favour of domestic debt, which is partly responsible for the high debt service figures.”
