Nigeria’s Debt Increase to N10.16tn

The nation’s total debt stock rose by N2.63tn ($16.84bn) from N7.53tn ($48.36bn) in March 2013 to N10.162tn ($65.2bn) as of March 31, 2014, indicating a 34.93 per cent rise within a period of one year, data released by the Debt Management Office on Wednesday showed.

From December 2013 to March 31, 2014, the country’s total debt stock rose by over N120bn from N10.04tn to N10.162tn, according to the latest statistics.

 The statistics showed that the domestic debt component of the Federal Government alone stood at N7.18tn ($46.12bn) as of March 31, 2014.

Going by the rebased Gross Domestic Product of $510bn, this means that the debt to GDP ratio of the country stands at 12.79 per cent.

The DMO statistics also showed that the external debt of both the states and the Federal Government stood at $9.17bn or N1.43tn.

The domestic debt stock of the states, on the other hand, stood at N1.55tn or $9.96bn. This was as of December 31, 2012.

Over a one-year period, the total debt increased by 34.93 per cent as it stood at N7.53tn or $48.36bn as of March 31, 2013.

FGN Bonds accounted for 57.52 per cent of the Federal Government’s domestic debt at

N4.13tn. The Nigerian Treasury Bills accounted for N2.74bn or 38.09 per cent, while the Nigerian Treasury Bonds accounted for N315.39bn or 4.39 per cent.

The growth of the nation’s debt stock can be seen in the budget for debt servicing. The Federal Government plans to spend N2.08tn servicing the country’s debt in the next three years.

The figures for debt servicing as well as the county’s debt stock are contained in the Medium Term Expenditure Framework and Fiscal Strategy Paper of the Federal Government.

The document stated that while N591.76bn was utilised in servicing the nation’s debt in 2013, the sums of N712bn, N684bn and N684bn would be used for the 2014, 2015 and 2016 fiscal periods, respectively.

The total amount for domestic debt servicing as of the end of December 2012 stood at N720.55bn, indicating an increase of 34.08 per cent over the level in 2011.

The total domestic debt service of the Federal Government as a percentage of the total domestic debt stock outstanding was 11.02 per cent in 2012, which was higher than the 9.56 per cent recorded in 2011.

Given the recent rebasing of the country’s GDP, which saw it rising to about $510bn, the debt to GDP ratio has significantly gone down.

However, the Minister of Finance, Dr. Ngozi Okono-Iweala, explained that the low debt to GDP ratio did not mean that the Federal Government would now go on a borrowing spree.

The statistics released by the DMO did not include the breakdown of the external debt status of each of the 36 states of the federation and the Federal Capital Territory.

However, the statistics published by the office in January showed that among the states, four with external debt profile above $100m ranked highest. These were Lagos, with $938,135,517.81; Kaduna, $241,309,864.17; Cross River, $121,966,922.51; and Ogun, $116,802,098.95.

This means that Lagos State accounted for 33.31 per cent of the external debt of the 36 states of the federation and the FCT. It also means that the four states accounted for 50.36 per cent of the states’ total external debt.