By Elizabeth Adegbesan
THE Central Bank of Nigeria, CBN, yesterday disclosed that the country’s outstanding domestic debt declined by N146 billion to N12. 4 trillion as at December 2018, from ?12. 6 trillion in the corresponding period of 2017.
The apex bank which disclosed this in its Annual Activity report for 2018 released yesterday, also stated that the cost of debt servicing during the period under review rose by 24 per cent to ?1.8 trillion from ?1.4 trillion at end-December 2017.
It stated: “The bank continued to act as registrar and issuing house for all federal government of Nigeria (FGN) securities as the government relied on domestic and foreign debt issuances to finance the budget deficit.
“Consequently, the stock of FGN domestic debt outstanding amounted to ?12,443.13 billion at end-December 2018. This represented a decrease of ?146.35 billion or 1.16 per cent below the ?12,589.49 billion at end-December 2017.”
Giving the reason for the gradual decline of the country’s domestic debt, the CBN stated: “The gradual reduction of domestic debt was partly as a result of the redemption of Nigeria Treasury Bills (NTBs) worth ?78.05 billion in December 2018 from the proceeds of the Eurobonds.
Cost of debt servicing
“Meanwhile, the cost of domestic debt servicing rose by ?344.21 billion or 23.65 per cent to ?1,799.53 billion at end-December 2018, from ?1,455.53 billion at end-December 2017.
“The increase in the cost of debt servicing in 2018 was attributable to the coupon payments of new instruments (such as FGN Sukuk, Green bonds and FGN Savings bonds) that formed part of the debt stock.’’