Wednesday, October 5, 2022

Nigeria’s debt rises to N42 trillion as Buhari regime promises better days ahead

The DMO assured that President Muhammadu Buhari’s regime is committed to increasing revenue to reduce the amount that went into debt servicing.

• September 20, 2022
Vice President Yemi Osinbajo/President Muhammadu Buhari
Vice President Yemi Osinbajo/President Muhammadu Buhari

The Debt Management Office (DMO) has announced that Nigeria’s total public debt stock is now N42.84 trillion ($103.31 billion) as of June.

It was N41.60 trillion ($100.07 billion) in March.

According to a statement from DMO’s website on Tuesday, the total debt represents the domestic and external debt stocks of the federal government, the 36 states and the Federal Capital Territory (FCT).

It noted that while the foreign component of the debt remained at the same level of N16.61 trillion ($39.96 billion), the local component increased to N26.23 trillion ($63.24 billion).

The local component of the country’s borrowings was N24.98 trillion ($60.1 billion) as of March 30. The DMO said a larger percentage of the external debts were concessional and semi-concessional loans.

“Over 58 per cent of the external debt stock are concessional and semi-concessional loans. They were obtained from multilateral lenders such as the World Bank, International Monetary Fund, Afrexim and African Development Bank, and bilateral lenders including Germany, China, Japan, India and France,” explained the DMO.

It added that the total domestic debt stock increased from N24.98 trillion ($60.1 billion) in March to N26.23 trillion ($63.24 billion) in June, pointing out that it “is due to new borrowings by the FGN to part-finance the deficit in the 2022 Appropriation (Repeal and Enactment) Act, as well as new borrowings by state governments and the FCT.”

The DMO further mentioned that the total public debt-to-GDP ratio remained within limits, at 23.06 per cent, while debt-service-to-revenue was still high.

It, however, assured that President Muhammadu Buhari’s regime is committed to increasing revenue to reduce the amount that went into debt servicing.

“The debt-to-GDP as of June 30 was 23.06 per cent compared to the ratio of 23.27 as of March 30. It remains within Nigeria’s self-imposed limit of 40 per cent,” the DMO noted. “While the federal government continues to implement revenue-generating initiatives in the non-oil sector and block leakages in the oil sector, debt service-to-revenue ratio remains high.”

(NAN)

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