Nigeria’s debt hits N12tn

Dr. Ngozi Okonjo-Iweala

The debt owed by both the Federal Government and the 36 states of the federation as well as the Federal Capital Territory has now hit N12.06tn, investigation has shown.

Statistics obtained from the Debt Management Office showed that the country’s public debt rose from N10.16tn as of March 31, 2014 to N12.06tn as of March 31, 2015.

This shows that the country’s indebtedness rose by N1.9tn within a 12-month period, with the public debt rising by 18.7 per cent.

Much of the growth, however, was as a result of the fall in the exchange value of naira against international currencies, especially the United States dollar, in the past eight months.

In dollar terms, the country’s public debt actually reduced by $65.25bn to $63.51bn in the one year period. The exchange rate of the naira to the dollar was N155.74 on March 31, 2014, while by March 31, 2015, it had fallen to N197.

In real terms, however, the public debt rose by 18.7 per cent because the local currency had taken a nosedive as a result of the reduced inflow of foreign exchange earnings following the crash of oil prices.

A dissection of the total public debt showed that much of it (N8.51tn as of March 31, 2015) was owed domestic creditors by the Federal Government.

Within the 12-month period, the domestic debt of the Federal Government rose by N1.33tn from the total N7.18tn recorded on March 31, 2014. This reflects an increase of 18.52 per cent.

The domestic debt of the state rose from N1.55tn to N1.69tn within the same period.

Similarly, the external debts of both the federal and state governments rose marginally from $9.17bn on March 31, 2014 to $9.46bn as of March 31, 2015.

A breakdown of the domestic debt profile of the Federal Government by instrument showed that FGN Bonds accounted for N5.37tn or 63.13 per cent of the total.

The Nigerian Treasury Bills, on the other hand, accounted for N2.87tn or 33.68 per cent of the Federal Government’s total domestic debt profile.

Similarly, Nigerian Treasury Bonds accounted for N271.22m or 3.19 per cent of the Federal Government’s total domestic debt profile.

Dwindling revenue as a result of declining oil prices had propelled the Federal Government to resort to domestic borrowing to finance its budgets.




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