By FBNQuest Research
The FGN’s external debt obligations at end-June amounted to $22.08 billion, equivalent to 5.9 percent of 2017 GDP.
This includes the external borrowings of the state governments, which are necessarily guaranteed by the FGN.
The debt stock was flat on the previous quarter because, unlike in Q1 when it raised $2.5 billion, the FGN did not tap the Eurobond market.
A small decline in obligations to the World Bank Group was balanced by a rise in debt due to bilateral creditors, notably the Exim Bank of China and Germany’s KFW (state-owned development bank).
ICM are again the largest creditor group, and are likely to remain so due to the FGN/DMO policy of externalization of debt. From a financing perspective, it is worth noting that 60.1 percent of the debt stock is due to multilateral and bilateral creditors on concessional terms.
In line with externalization, the N1.95 trillion deficit in the FGN’s 2018 budget is to be covered by external and domestic borrowings of N850 billion ($2.8 billion) and N790 billion respectively as well as unspecified privatization proceeds of N310 billion.
There has been a surge in warnings about the sustainability of Nigeria’s public debt stock, some of them influenced by regret that commercial borrowings come without policy conditionality.
At current levels, the FGN can comfortably service external debt of $22 billion from the earnings accruing from oil production of +/-2.0 mbpd.
There is a more useful conversation to be had about the pace at which the FGN’s borrowings are funding an overhaul of the infrastructure and transformation of the economy from a rent-seeking to a producing model.
more recommended stories
Prices of Rice, Tomato, Beans, Garri, Others Drop in June
By Adedapo Adesanya The prices of.
Asian Shares Fall Amid UK, Iran Tensions
By Investors Hub Asian stocks ended.
European Stocks Rise Ahead of Emergence of New UK PM
By Investors Hub European stocks have.
Wall Street Points to Initial Rebound on Earnings Optimism
By Investors Hub The major U.S..
Unilever Nigeria Board Approves H1’19 Results
By Modupe Gbadeyanka The board of.
UBA Marketplace 2019 Kicks Off Friday
By Adedapo Adesanya Africa’s leading financial.
Investors to Access N300bn to Boost Power Supply
By Adedapo Adesanya The Federal Government.
MPC Meeting: Experts Predict Rate Cut to 13%
Modupe Gbadeyanka As the Monetary Policy.