Nigeria’s Debt Rises To N8.32tn -

The nation’s total debt now stands at
N8.32tn ($53.42bn), the Debt Management
Office has said.
The latest statistics released by the DMO on
its website on Monday showed that as of
September 30, 2013, the total debt
comprised the external debts of the Federal
Government and the state governments as
well as the domestic debt component of
the Federal Government.
This means that the data did not include
the domestic debt component of the 36
states of the federation and the Federal
Capital Territory Administration.
A breakdown of the debts showed that the
external debts of both the Federal and state
governments stood at N1.28tn ($8.26bn) as
of September 30.
Much of the debts, however, were incurred
by the Federal Government from domestic
sources as these contributed N7.03tn ($
4.15bn) to the total debt stock.
A further breakdown of the domestic
component of the total debt stock showed
that the Federal Government Bonds
contributed N4.22tn or 59.93 per cent of
the domestic debt.
The Nigerian Treasury Bills accounted for
N2.48tn or 35.31 per cent of the domestic
debt component. Treasury Bonds, on the
other hand, accounted for N334.56bn or
4.76 per cent of the domestic debt of the
Federal Government.
As of June 2011, the total debt of the
country stood at $37bn. In terms of
instruments, the FGN Bonds accounted for
N4.03tn or 58.87 per cent of the Federal
Government’s domestic debt stock then.
The Nigerian Treasury Bills accounted for
N2.48tn or 36.25 per cent of the domestic
debt component.
On the other hand, Treasury Bills
accounted for N334.56bn or 4.88 per cent
of the total domestic debt owed by the
Federal Government.
The Director-General of the DMO, Dr.
Abraham Nwankwo, had recently said that
compared to the level of foreign debt, the
Federal Government had over-borrowed
from domestic sources.
While unfolding the nation’s Middle Term
Debt Management Strategy, which was
approved by the Executive Council of
Nigeria, Nwankwo said there was an urgent
need to rebalance the structure of the
nation’s debt because the interest rate
payable on domestic debt was too high.
He said the ratio of the Federal
Government’s domestic debt stood at 88
per cent while that of the foreign debt
stood at 12 per cent.
Nwankwo said the appropriate ratio should
be 60 per cent for domestic debt and 40
per cent for foreign debt, adding that the
newly approved Medium Term Debt
Management Strategy would seek to
achieve this ratio.
One of the ways of doing this is through the
establishment of a sinking fund for retiring
local debts that get matured. The second
way is by borrowing more from foreign
sources.
Nwankwo said, “The main objective of the
Medium Term Debts is to develop a strategy
that would meet the financing needs of the
government at a minimum cost, maintain
risk at a prudent level and support the
development of the market.”
source- http://www.punchng.com/
business/business-economy/nigerias-debt-
rises-to-n8-32tn/

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