New Telegraph

Nigeria’s debt rises by N26.95trn in six years

  • Debt-to-GDP still within 40% limit

The country’s total public debt portfolio rose by N26.95trillion between December 2015 and December 2021, findings by New Telegraph show.

According to data obtained   from the Debt Management Office (DMO), Nigeria’s total debt as of December 31, 2015, stood at N12.60trillion.

However, statistics released by the DMO last Thursday indicate that as of December 31, 2021, the country’s debt portfolio had risen to N39.56trillion.
This means that within a period of six years, the country’s debt increased by 213.86 per cent (N26.95trillion).

New Telegraph’s analysis of the DMO data shows that from N12.60trillion at the end of December 2015, the nation’s public debt stock rose to  N17.36trillion, N21.73trillion and N24.39trillion at the end of 2016, 2017 and 2018 respectively.
Similarly, the public debt stock headed north

develbetween 2019 and 2021, rising from N27.40trillion in 2019 to N32.92trillion and N39.56trillion in 2020 and 2021 respectively.

According to the DMO, of the country’s total public debt portfolioof N39.56trillionasof December 31, 2021, domestic debt constituted N23.7 trillion or 69.92 percent, compared to N15.855trillion(40.08per cent) external debt.

The DMO further states that the Federal Government’s portion of the public debt, as at the end of last year, was N33.228 trillion, with domestic debt accounting for N19.243 trillion and external N13.885 trillion.

On the other hand, the 36 state governments and the Federal Capital Territory owed a total of N6.428 trillion, with domestic and external debt accounting for N4.46 trillion and N1.97trillion respectively.

Explaining the significant rise in the country’s public debt stock, the Director-General (D-G), DMO, Ms. Patience Oniha, at a press briefing last Thursday, attributed it to new borrowings by both the Federal Government and states, including the Federal Capital Territory (FCT) in the 2021 fiscal year, to finance projects.

She said: “For the Federal Government, it would be recalled that the 2021 Appropriation and Supplementary Acts included total new borrowings of N5.48 trillion to part-finance the deficits.

 

Borrowing for this purpose, and disbursements by multilateral and bilateral creditors account for a significant portionof theincreasein the debt stock.’

“The new borrowings were raised from diverse sources, primarilythroughthe issuances of the Eurobonds, Sovereign Sukuk and FGN Bonds. These capital raisings were utilized to finance capital projectsandsupporteconomic recovery.”

 

The DMO D-G emphasised that with Nigeria’s total public debt stock to Gross Domestic Product (GDP), as at December 31, 2021, standing at 22.47per cent, the country’s Debt-to- GDP ratio still remained within the Federal Government’s self-imposed limit of 40per cent.

 

“This ratio is prudent when compared to the 55per cent limit advised by the World Bank and the International Monetary Fund (IMF) for countries in Nigeria’s peer group, as well as, the ECOWAS Convergence Ratio of 70per cent,” she said.

Oniha also addressed concerns about the country’s rising debt stock, especially its high Debt-to-Revenue Ratio, noting that borrowing is essential to finance the Federal Government’s budget deficits and specific infrastructure projects required to boost economic growth.

 

The DMO boss, who reiterated that Nigeria’s problem is essentially revenue and not budget size, said: “Future generation will benefit from infrastructure development utilized by the borrowing. Don’t forget that, some of these facilities have 25 to 40 years repayment plan.”

New Telegraph reports that a few hours after the press briefing, the DMO announced that Nigeria had raised $ 1.25 billion 7 year Eurobond on Thursday, thus emerging the first Africa country this year to accesstheinternationalcapital market.

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