Nigeria’s domestic public debt rises 10% so far under Buhari

19 Oct 2015
Chibuike Oguh

Summary

The nation’s total public debt rose to N13.15 trillion as at October 17, up from N12.11 trillion on June 30.

Nigerian President Muhammadu Buhari

Nigeria’s total public debt stock has grown by 8 percent in almost four months. The nation’s total public debt rose to N13.15 trillion as at October 17, up from N12.11 trillion, the figures reported by the Debt Management Office (DMO) on June 30.

The latest figures were given by Dr. Abraham Nwankwo, the director-general of the DMO, while speaking to journalists last Friday at a workshop in Kaduna.

Nigeria’s domestic debt rose to N11 trillion as at October 17, up from N10 trillion on June 30, a 10 percent rise. External debt rose to $11 billion (N2.178 trillion) from $10.32 billion (N2.031 trillion) in the same time period, according to figures from Nwankwo and the DMO website.

The nation’s domestic debt stock constituted about 84% of total public indebtedness as at June 30, while external debt was 16%.

“Let me emphasize that what matters is not just the quantum,” Nwankwo said. “What is important is how these resources are deployed to encourage growth, development, generate employment and reduce poverty.”

Over the past few months, Nigeria’s foreign and domestic debt has steadily risen as a result of World Bank loans to some states and a special intervention by the new government of President Muhammadu Buhari to bail out cash-trapped states.

The nation’s foreign debt stock, which includes both the federal and state governments, stood at $10.31 billion as at June 30, according to figures from DMO. Nigeria’s debt-to-GDP ratio is about 10 percent, which is among the lowest in emerging markets. The debt-to-GDP ratio for Kenya and South Africa is over 40 percent.

In July, President Muhammadu Buhari approved a N1 trillion-debt relief programme for the 36 states. The programme involved a package of measures such as financing from the Central Bank of Nigeria worth up to N300 billion, and the repacking of commercial loans to states by the DMO worth up to N600 billion.

In June, the World Bank approved a $200 million credit facility for the “Third Lagos State Development Policy Operation”, which facilitates transparency in the budget system, effectiveness of public expenditures and the investment climate in Lagos state.

In August, the Nigerian senate approved a $75 million World Bank soft loan for Edo state. This loan is the second tranche of a $225 million credit facility to boost public financial management, private investment and the education system in Edo state.

As at December 31st 2014, total public debt stock stood at $67.73 billion (N11.24 trillion). Total external debt was $9.71 billion (N1.63 trillion), while total domestic debt was $58.01 billion (N9.61 trillion), according to the DMO.

Chibuike Oguh is a Financial Nigeria Staff Writer


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