Nigeria’s debt profile rises

Ms Patience Oniha, Director-General, Debt Management Office (DMO), says the total public debt of Nigeria as at Dec. 31, 2018 is N24.38 trillion.

Oniha, who made the disclosure during a news conference on Thursday in Abuja, said that the figure comprised of debt owed by the Federal Government, States and Federal Capital Territory (FCT).

She explained that the figure was N2.66 trillion higher than the N21.7 trillion recorded as at Dec. 31, 2017, and represents a year-on-year growth of 12.25 per cent.

“Further details provided in the report showed that more progress was made towards achieving the target Debt Stock mix of 60 per cent (Domestic) and 40 per cent (External).

“The share of domestic debt dropped to 68.18 per cent from 73.36 per cent as at Dec. 31, 2017 thereby achieving a mix of 68.18 per cent and 31.82 per cent in the debt stock.”

She said the federal government loans accounted for 78 per cent of the figure, while states and the FCT accounted for 22 per cent.

The Federal Government, she said, has an external debt stock of N6.4 trillion and Domestic at N17.11 trillion, culminating in N19.23 trillion, while the states and the FCT have external debt of N1.25 trillion and N3.85 trillion domestic debt, culminating in N5.15 trillion.

Oniha said that the Federal Government’s domestic debt stock includes N331.12 billion Promissory Notes issued to Oil Marketing Companies and State Governments in December 2018.

She added that the strategy of using relatively cheaper and longer tenor external funds was achieving the expected objectives, some of which were to create more space for other borrowers in the domestic market.

“Other objectives are to extend the average tenor of the debt stock in order to reduce refinancing risk and increase external reserves.”

She also said that the implementation of the strategy led to an injection of N855 billion through the redemption of Nigerian Treasury Bills (NTBs) in 2018.

She added that it also effected a general drop in the Federal Government’s borrowing rate in the domestic market from over 18 per cent per annum in 2017 to between 14 and 15 per cent per annum in 2018.

The DG said that some of the major plans of the DMO in 2019 were to undertake more of project-tied borrowing and access more external borrowing from concessional sources.

According to her, there are plans to issue 30-year Federal Government Bonds for the first time.

“The issuance of the bond will meet the needs of annuity funds and other long term investors while also developing the domestic capital market and reducing the re-financing risk of the Federal Government.

“Another area of focus will be the management of risks associated with the debt stock to mitigate debt service costs.”

She said that as captured in the 2019 budget proposal before the National Assembly, the Federal Government would borrow N1.6 trillion to finance the budget deficit.

She said N824 billion of the amount would be borrowed domestically through Federal Government Bonds, Sukuk, Green Bonds and Savings Bonds.

The other N824 billion is expected to be financed externally from concessional sources as they are cheaper and are longer-termed funds for infrastructure, she added.

Oniha said that the planned N15 billion Green Bonds and the infrastructure bonds would be issued in the second quarter of 2019.

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