Newsfront Online …Telling the Public as it is
…FG spends N609bn on domestic debt servicing
The Debt Management Office on Thursday disclosed that Nigeria’s total debt profile as at March 31,2020 now stands at N28,628,493.63 trillion.
This was as the Federal Government spent N609,134,926,039 billion on domestic debt servicing between January and March this year. In January, it spent N251,352,673,904 billion, N158,123,337,830 billion in February and N199,658,914,304 billion in March. The servicing instruments include treasury bills, Sukuk bonds, trade bonds, among others. The figures, contained on its website, is a slight increase from the N27.4 trillion figure of December 31, 2019.
A breakdown of the figure shows that the total external debt is N9,978,303.26 trillion representing 34.89 per cent of the debt profile; while total domestic debt is N18,641,190.37 trillion (65.11 per cent). Federal Government’s debt stands at N14,534,746.84, representing 50.77 per cent. The debt of the States and Federal Capital Territory stands at N4,1.6,443.53 trillion (14.43 per cent).
The DMO clarified that the domestic debt stock for 28 States, (Abia, Adamawa, Akwa Ibom, Bauchi, Bayelsa, Benue, Cross River, Delta, Ebonyi, Edo, Ekiti, Enugu, Gombe, Imo, Jigawa, Kaduna, Kogi, Kwara, Nassarawa, Niger, Ogun, Ondo, Osun, Oyo, Plateau, Sokoto, Taraba, Yobe, and FCT) were as at March 31, 2020, while domestic debt stock for Anambra, Borno Kano, Kebbi and Zamfara State was as at December 31, 2019, Domestic Debt Stock of Katsina State was as at June 30, 2019, and Rivers State was as at December 31, 2018. “CBN Official Exchange Rate of US$1 to NGN361 as at March 31, 2020 was used in converting External Debt to naira”, it added.
Meanwhile, amid fears of Nigeria’s high debt exposure, the DMO assured that the external debt were concessional, long tenor, low-interest facilities. It referenced China as one of Nigeria’s creditors, assuring that there was nothing to panic about as the loans were concessional with interest rates of 2.50% per annum, tenor of 20 years and a moratorium of seven years. It added that the communist country was not a major source of funding for the Federal. It ruled out the possibility of China taking possession of the projects financed by them if Nigeria defaults in servicing the loan.
The DMO emphasized that Nigeria explicitly provides for debt service on its external and domestic debt in its annual budgets, adding that a number of the projects being (and to be) financed by the loans are either revenue generating or have the potential to generate revenue. The DMO added that the $3.121 billion Chinese debt represents only 3.94% of Nigeria’s total public debt of $79.303 billion (N28,628.49 trillion at USD/N361) as of March 31, 2020.
Source: The Sun
