Breaking News
Translate

National public debt rises to N22.7trn in Q1’18

By Elizabeth Adegbesan

Nigeria’s public debt rose by 4.5 percent    to N22.7 trillion in the first quarter of 2018 (Q1’18) due to increased domestic borrowing by state governments and increased foreign borrowing by the federal government.

debt

This is coming along with quantum 173 percent jump in the nation’s debt servicing cost  to N724 billion during the quarter.

Disclosing these yesterday, the Debt Management Office (DMO) explained: “The increase was accounted for largely by the increase in the Domestic Debts of States and the Federal Capital Territory (FCT), as well as, the $2.5 billion Eurobond issued in February 2018 whose proceeds were still being deployed to redeem maturing Domestic Debt.”

Giving the positive side of the development, however, DMO said, “The debt    figures    show    that    the    implementation    of    the    debt    management    strategy which entails an increase in the External Debt Stock through new external borrowings and    the    substitution  of    high    cost    domestic    debt    with low    cost    external    debt, is achieving the desired results in several areas amongst which are:

“The share of the External Debt Stock in the Total Public Debt rose to 30 percent    as at March 31, 2018, compared to 17 percent in 2015, 20 percent    in2016 and 27 percent in 2017.

“A decline in market interest rates from 13 –14 percent    per annum (p.a) in December 2017 to 11 –13 percent    p.a. in Q1’18 due to the redemption of N279.67 billion of Nigerian Treasury    Bills  (NTBs)    using    some    of    the    proceeds    of    the    $2.5    billion Eurobond issued in February 2018.

“While the redemption of NTBs made more funds available to banks for lending to the private sector, the decline in Interest Rates implies lower cost of borrowing for the private sector. Thus, the government is actively enabling the private sector through the instrumentality of financial markets, to play a leading role in economy.”

Vanguard analysis revealed that the    federal government spent N724 billion on debt service in Q1’18, up by 173 percent from N264.84 billion spent in Q4’17, as domestic debt service hit  N643.6 billion in Q1’18 up from N236.04 billion in Q4’17, while    external debt service rose by 179 percent to $225.25 million or N81billion in Q1’18 from    $80.6 million or N29 billion in Q4’18.


Disclaimer

Comments expressed here do not reflect the opinions of vanguard newspapers or any employee thereof.