Nigeria Debt Portfolio Rises To N22.4trn In 6 Months

Nigeria’s total debt profile rose by a marginal 3.01 per cent between 2017 December and June 2018, the nation’s Debt Management Office (DMO) has said.

The total public debt, which includes the domestic and external debt stock of the federal government, the 36 state governments and the Federal Capital Territory, stood at N22.38 trillion (or $73.21 billion) as at June 30, this year. The director-general of the debt office, Ms Patience Oniha, during a media briefing yesterday in Abuja, said the increase in the Public Debt Stock over the six-month period was due largely to the $2.5 billion Eurobond issued in February 2018.

Nigeria currently has 18 per cent debt ratio, which shows it is still below the 25 per cent rate the law allows the federal government to reach. Nigeria, which boasts the largest economy in Africa, plans to borrow N1.6 trillion from both domestic and external bond markets to finance a deficit in the 2018 budget approved by President Muhammadu Buhari in June. Ms Oniha disclosed that N410 million had been raised from the domestic market to fund the 2018 budget. When compared to the debt data for March 2018, the public debt profile actually decreased by 1.44 per cent from N22.707 trillion in March 2018 to N22.38 trillion in June 2018.

The decrease was due to a 3.38 per cent decline in FG’s domestic debt between March and June 2018. There were, however, marginal increases of 0.07% in the external debt stock and 2.75 per cent in the domestic debt of states. A major highlight in the public debt data was the consistent decrease in federal government’s domestic debt, which declined from N12.589 trillion in December 2017 to N12.577 trillion in March 2017 and N12.151 trillion in June 2018.

According to the DMO, this reduction in domestic debt stock arose from the redemption of N198 billion Nigerian Treasury Bills in December 2017 and another N639 billion between January and June 2018. 

It will be recalled that a total of $3 billion was raised through Eurobonds to refinance maturing domestic debt as part of the implementation of the debt management strategy for the purpose of substituting high cost domestic debt with lower cost external debt to reduce debt service costs for the government.

The DMO explained that the implementation of the Public Debt Management Strategy, whose overall objective is to ensure that Nigeria’s debt is sustainable, was already yielding positive results. “One of the beneficial outcomes is the rebalancing of the debt stock; the ratio of domestic debt to external debt inching towards the target of 60:40 and the target of 75:25 between long term domestic debt and short term domestic debt,” the DMO chief executive said.

According to the figures for June 30, 2018 released by the debt office, the ratio between domestic and external debt stood at 70:30 compared to 73:27 in December 2017. Similarly, the ratio between long term domestic debt to short term domestic debt was 76:24 in June 2018 compared to 72:28 in December 2017.

 Oniha said activities of the DMO in recent time had resulted in lower interest rates for the benchmark federal government securities from about 18.5% in January 2017 to 11-14% in the first half of 2018. She noted that with the redemption of about N840 billion of Nigerian Treasury Bills, more funds were available for lending by banks to the private sector, adding that external capital raising activities also contributed to the increase in external reserves.


Chris Kehinde Nwandu is the Editor In Chief of CKNNEWS || He is a Law graduate and an Alumnus of Lagos State University, Lead City University Ibadan and Nigerian Institute Of Journalism || With over 2 decades practice in Journalism, PR and Advertising, he is a member of several Professional bodies within and outside Nigeria || Member: Institute Of Chartered Arbitrators ( UK ) || Member : Institute of Chartered Mediators And Conciliation || Member : Nigerian Institute Of Public Relations || Member : Advertising Practitioners Council of Nigeria || Fellow : Institute of Personality Development And Customer Relationship Management || Member and Chairman Board Of Trustees: Guild Of Professional Bloggers of Nigeria

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