Nigeria’s Debt Rises 7.1% in Three Months—DMO

By Sodeinde Temidayo David

Nigeria’s total debt stock hit N35.5 trillion in the second quarter of this year (Q2 2021), N2.36 trillion or 7.1 per cent higher than the N33.10 trillion recorded in Q1 2021.

This was revealed during a virtual media presentation on Wednesday by the Debt Management Office (DMO). The agency gave a breakdown of the country’s public debt stock amid backlash over the intention of President Muhammadu Buhari to borrow fresh $4 billion and €710 million.

Also, the debt office said during the meeting yesterday that the current debt level of the country was 7.75  per cent higher than the N32.9 trillion recorded at the close of last year.

The total public debt is made up of domestic and external debts of the federal and 36 state governments as well as the Federal Capital Territory (FCT).

At the end of Q2 2021, external debt stock made up 38.7 per cent while domestic debt stock made up 61.3 per cent of the total public debt stock.

The federal government accounted for 83.1 per cent of the debt burden while the 36 states and the federal capital territory (FCT) held 16.9 per cent.

According to the Director-General of the DMO, Ms Patience Oniha, the external debt accounted for N13.7 trillion or 38.7 per cent while approximately N21.8 trillion was sourced from the local market.

In her presentation, she said the total external debt stock rose from N12.47 trillion as of Q1 2021 to N13.71 trillion in the following quarter, indicating an increase of N1.24 trillion or 9.9 per cent.

In the same vein, the total domestic debt stock rose from N20.64 trillion as of the first quarter of this year to N21.8 trillion in Q2 2021, representing an increase of N1.1 trillion or 5.4 per cent.

A breakdown of the external debt data at the end of the second quarter showed that multilateral debt, from World Bank Group and African Development Group, led the list of Nigeria’s creditors with a share of 54.9 per cent.

The percentage of share was followed by commercial debts like Eurobonds and diaspora bonds which make up 31.9 per cent.

It was revealed that bilateral loans from China, France, Japan, India and Germany accounted for a share of 12.7 per cent, while promissory notes accounted for 0.5 per cent of the total debt stock.

The DMO boss stressed that the country is at risk of the debt sustainability issue if it fails to grow the current low revenue record, and solve issues around the use of debt proceeds.

Ms Oniha noted that the government will need to expand its revenue base and promote public-private partnerships.