Not less than a whopping N7.51trillion has been indebted by the Federal Government and the 36 states of the federation, including the Federal Capital Territory, latest figure obtained has shown.
When considered the nation’s debt figure which stood at N12.12 trillion as at June 30, 2015, skyrocketed to N19.63 trillion of June 2017, latest debt statistics obtained from the Debt Management Office (DMO) has revealed.
The debt stock data released by the DMO revealed that the total public debt stock (external and domestic debt stock of the Federal Government and sub-nationals) as of the end of June was N19.63tn (about $64.19bn at N305.9/$1), made up of external debt stock of N4.6tn (about $15.05bn) and domestic debt stock of N15.03tn (about $49.15bn).
The DMO said in a statement posted on its website recently that the domestic debt stock of the Federal Government and sub-nationals accounted for 76.56 per cent of the total public debt stock, while their external debt stock accounted for 23.44 per cent.
“Furthermore, the total public debt stock increased by 2.5 per cent from N19.16tn (about $62.54bn) to N19.64tn (about $64.19bn), during the period under review.
“The total external public debt stock of the Federal Government and sub-nationals increased by 8.98 per cent from $13.81bn in March 2017 to $15.05bn in June 2017, while the domestic debt stock of the Federal Government and the sub-nationals increased by 0.67 per cent from N14.93tn in March 2017 to N15.03tn in June 2017.”
However, an analysis of the debt statistics from the May 29, 2015, when the current leaders took over the reins of power, to June 30, 2017, showed that the country’s total debt had risen from N12.12tn to N19.63tn.
This means that the country’s debt rose by N7.51tn or 61.96 per cent within a period of two years.
As of June 2015, the domestic debt of the Federal Government stood at N8.39tn. Detailed breakdown of the domestic component of the nation’s total debt as of June 30 was not available as of the time of going to press on Sunday.
However, the Federal Government’s domestic debt stood at N11.97tn, while the domestic debt component of the states stood at N2.96tn as of March 31, 2017.
The external debt balance of both the federal and state governments stood at $10.32bn as of June 2015 compared to the $15.05bn recorded as of the end of June this year. This means that within the period, the country’s external debt portfolio had risen by $4.73bn or 45.83 per cent.
The increasing proportion of the foreign debt component reflects a new debt management strategy released by the DMO recently. It also reflects a strategy to reduce high interest payment occasioned by much dependence of domestic debts.
According to the DMO, the country’s new debt management strategy entails balancing the sources of debt to ensure that more resources are borrowed from external sources where the interest rate is seen as lower than interest rates on borrowings from domestic sources.
The Debt Management Strategy 2016-2019 targets the rebalancing of the debt portfolio from its composition of 84:16 (domestic to foreign) to 60:40 by the end of December 2019 (domestic to foreign).
“It supports the use of more external finance for funding capital projects, in line with the focus of the present administration on speeding up infrastructural development in the country, by substituting the relatively expensive domestic borrowing in favour of cheaper external financing,” the DMO said.