By Emma Ujah, Abuja Bureau Chief
The nation’s total debt stock escalated in 2018 to N24.387 trillion ($79. 437 billion), about N2.7 trillion or 9.1 per cent higher than the N21.725 trillion recorded at end of 2017. Perhaps, the huge addition was recorded in the fourth quarter of 2018 which came with N1.96 trillion or 8.03 per cent increase against the N22.428 trillion recorded at end of September 2018.

Director-General of the Debt Management Office, DMO, Ms. Patience Oniha, disclosed this while briefing newsmen on the national debt profile in Abuja yesterday.

She said that domestic debt accounted for 68.18 percent of the figure which consisted of debts owed by both the federal and state governments.

The N24.387 trillion debt stock at the end of 2018 represented a N 2,661trillion or 12.25 per cent increase above the figure of December 31, 2017, which stood at N 21.725 trillion.

The DMO said that the CBN Official Exchange Rate of US$1/N306 as at December 31, 2017 and US$1/ N307.00 as at December 31, 2018 were used for the conversion of External Debt Stock to Naira.

The new borrowings since the current administration came into power were: 2015, N1.457 trillion; 2016, not available; 2017, N2.321 trillion; 2018 N 1. 643 trillion; and 2019 (as proposed) N1.649 trillion.

States’ debt

  An analysis of the presentation by the D-G indicated that the Federal Government debt stock was N17.117 trillion as of December 2017 but increased to N19.234 trillion at the end of last year, representing an increase of  543.65 or 11.80 per cent.

On the Promissory Notes, she said the Federal Executive Council, FEC, approved the establishment of a Promissory Note Programme for the settlement of Inherited Local Debts and other contractual obligations of the federal government.

The Programme which had been estimated to be at N3.4trillion would also be used to pay judgment debt and export grants.


On the benefits, Ms. Oniha said: “It will provide stimulus to the economy and unlock investment across a number of sectors currently having liquidity issues.

“It will also have positive impact on the non-performing loan ratios of banks which will in turn, increase the banks’ capacity to lend and enable the Federal Government to formally recognise and account for its true liabilities in line with the International Public Sector Accounting Standards, IPSAS.

The Notes, according to the DMO, will positively impact the economy because they will  be sovereign instruments, negotiable and have liquid asset status.

Already, as at December 31, 2018 – N331.12 billion Promissory Notes had been issued to oil marketers and state governments.

The D-G said that the executive arm of government would issue the Notes as the National Assembly approved them.

According to her, the liabilities covered under the programme were those from June 2017 backwards.

She explained that the Notes issued in respect of the oil marketers and state governments’ refunds were approved by the federal legislature.

According to her, some of the Notes yet to be issued to oil marketers, last year, would be paid this year.

Speaking on the 2019 borrowing plan, the D-G said the Federal Government will focus on longer-tenor bonds of up to 30-years with relatively low interest rates, compared to 2017 levels of over 18 per cent.

Benefits of such long-term instruments, the DMO boss said, include enabling the Federal Government to raise long-term capital for infrastructure and serve as benchmark for private sector operators to equally raise long-term investment capital from the capital market.

“It will reduce short-term debt. It will deepen the Life Insurance sector in particular,” she added.

The D-G said her team was confident that the huge pension funds in the country would be readily deployed to investments in long-term debt instruments of the Federal Government and corporate organisations that would follow the example of the government.

Ms. Oniha said that 50 per cent of the N 1. 649 trillion borrowings proposed in this year’s  budget would be sourced from foreign concessionary sources, while the other 50 per cent would be sourced locally.

She said with reduced rates being witnessed in the economy, the cost of debt service will also reduce, thereby freeing more resources to enable government invest more in infrastructure and the social sectors.

Subscribe to our youtube channel


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