Nigeria’s Total Public Debt rises to N26.215 trillion

By Abigail Egbunu in Abuja

 

The Director General Debt Management Office (DMO), Patience Oniha, has said Nigeria’s total public debt as at September 2019, stood at N26.215 trillion.

Speaking during a Presentation on Public Debt to stakeholders on Friday in Abuja, she explained that the debt comprised of the Federal Government, the 36 States and the Federal Capital Territory (FCT) within the period.

 

According to her, the total public debt as at September 2019, includes promissory notes amounting to N821.651 billion, which was issued to offset the Federal Government’s arrears to oil marketing companies and state governments under the promissory programme approved by the Federal Executive Council (FEC) and the National Assembly.

 

While disclosing that the total public debt grew by 2.0%  within July to September as the comparative figure for June 2019 was N25.701 trillion, she unveiled new borrowing plans in line with the 2020 Appropriation Acts, of N850 billion and N744.99 billion for external and domestic borrowing respectively.

 

Oniha who stressed that the new domestic borrowings will be raised through FGN Bonds, SUKUK, FGN Saving Bonds and possibly Green Bonds, said since Nigeria exited recession in 2017, the level of New Borrowings in the Appropriation Acts declined consistently.

 

In her words: “Whereas the 2019 Appropriation Act provided for a total new borrowing of N1.605.63  trillion split equally between domestic and external, only the domestic component of N802.82 billion was raised due to the late passage of the 2019 Appropriation Act and expectation that the implementation of the 2020 Budget would commence on January 1, 2020.”

The DMO boss also noted that among the highlights of the DMO’s achievements for 2019, was the issuance of a 30-year FGN Bond for the first time, to meet the investment needs of long-term investors such as insurance companies and to support the development of the domestic financial markets in areas such as mortgages.

 

While noting that the Federal Government’s perspective of the 30-year Bond also contributed to reducing the refinancing risks of the Public Debt Stock, she maintained that the product has enjoyed a strong demand as N284.391 billion and that N570 billion had been issued by the end of September 2019 and December 2019 respectively.

 

Oniha added that the ratio of domestic debt to external debt at 69:31 was about the same as at June 2019 and 68:32 compared to the target of 60:40 in the Medium-Term Debt Strategy, while the Ratio of Long Term to short Term Debt in the Domestic Debt was 80:20 which shows that the target of 75:25 had been outperformed.

 

“Similarly, Total Debt as a percentage of GDP was 18.47% as at September 2019 was well within the limit of 25% and fares better in comparison with the debt/GDP ratios of countries such as the United States of America, United Kingdom and Canada with ratios of 105%, 85% and 90% respectively for same period.

“However, because they generate adequate revenues, their debt service/revenue ratios for the same period were much lower at 12.5%, 7.5% and 7.5% respectively when compared to Nigeria’s 51% in 2017.

 

“The low revenue base of Nigeria relative to its GDP is clearly reflected in the high debt service to revenue ratio. This clearly brings to fore, the need for revenues to grow. The efforts towards increasing and diversifying revenue such as the passage of the Finance Act and Strategic Revenue Growth Initiative of the federal ministry of finance, Budget and National Planning should thus be supported,” she added.

 

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