By Tunde Johnson, Abuja
The Debt Management Office (DMO) has revealed that Nigeria’s debt stock has hit a new high level of N20.37trillion.
Patience Oniha, Director General, DMO, in a statement made available to Elendu Reports in Abuja said the total public debt stock comprising the Federal Government of Nigeria, the 36 states including the Federal Capital Territory, stood at N20.37tn as of September 30.
Elendu Reports can report that the nation’s debt profile has hit a marginal increase of 3.6 per cent from the N19.64tn 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 boss, 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 $5.5bn.
According to Oniha, the amount which comprises of $2.5bn in new borrowing to part finance the N2.32tn deficit in the 2017 Appropriation Act and $3bn to repay maturing domestic debt is expected to achieve a reduction in interest costs of about N75bn and N91bn respectively when compared to the interest cost of borrowing in Naira in the domestic market.
The strategy will also contribute to attaining the target ratio of 60:40 between domestic and external debt, the DMO said.
Other benefits of the strategy, according to DMO, include increased availability of funds to the private sector and lower domestic lending rates both of which will enable the private sector contribute to growth, as well as, higher level of eternal reserves to support the Naira exchange rate.