Osinbajo’s Claim On Nigeria’s Debt Profile ‘Misleading’ – BudgIT

A civic tech organization, BudgIT, has said claim by Vice President, Yemi Osinbajo, that the Federal Government had borrowed only $10billion since 2015 when the current administration took power is “misleading”.


BudgIT, which tracks government budgets and projects execution, was reacting to claims made by Osinbajo during the 9th public lecture of Sigma Club in Ibadan on Saturday.

In a series of tweets on the vice president’s presentation, BudgIT states:

“The current rise of $10bn in public debt stock does NOT tell the full story. It can be MISLEADING. We have seen arguments explaining that the entire Federation borrowed only N3tn in three years since the debt stock rose by $10bn.

“It is important to deconstruct the FG debt into EXTERNAL and DOMESTIC debt to get a full understanding for purposes of accountability. Please note that FG Debt Stock = External Debt + Domestic Debt. We will add links for private verification.

“DMO figures showed that FG EXTERNAL debt alone grew from $7.34bn in June 2015 to $17.83bn in June 2018, that’s an additional $10.49bn in 3 years. This is FG EXTERNAL DEBT ONLY. Let’s consider FG domestic debt.


“DOMESTIC debt of FG as at June 2015 was N8.39tn while it stood at N12.15tn as at June 2018. That’s another increase of N3.76tn in 3 years. At an exchange rate of N305/$, that’s $12bn. This means the total increase in EXTERNAL and DOMESTIC debt is $22bn.

“It is a public knowledge that the Naira was DEVALUED in recent years, and this act shrunk and expanded a lot of indexes. Those who put forward $10bn are comparing the wrong values without adding the important information that exchange rates for the times are different.

“NOTE: The Exchange rate of $ to 305.70 was used in converting the DOMESTIC debts to USD.

“In our observation, this administration (FG alone) borrowed $22bn in three years but due to naira devaluation GAINS, total public debt stock (for the entire Federation) increased by $10bn, which makes current claims TRUE.

“We advise citizens to analyze data by properly checking public websites. However, it is true that public debt is now $63bn, grew by $10bn, because FG domestic debt in USD terms was $42.63bn in June 2015 and $39.75bn as at June 2018.


“This does not mean that FG borrowed less DOMESTIC debt in 3 years. As we have shown above, the domestic debt of FGN grew from N8.39tn to N12.15tn from 2015 to 2018 respectively. .DEVALUING exchange rate from N196.95/$ to N305.7/$ made the domestic debt in 2018 relatively SMALLER in USD terms.

“SCENARIO: It is like borrowing N1,000 in 2015 which is $5 at N200/$. If you borrow additional N500 at a new exchange rate of N300/$, you now owe N1,500 but you still owe an equivalent of $5.

“Looking at the table above showed that Naira equivalent of the total debt has risen from N12.1tn to N22.4tn, a growth of N10.3tn.

“It is important to classify debt into two categories considering that external debt will be paid in USD or other currencies while domestic debt will be settled in Naira. This also has IMPLICATION for debt SERVICING costs in the near term.

“We also hope this “MARGINAL” increase in debt in USD terms does not unleash excessive borrowing by the Federation considering that public revenue in USD equivalent has also severely SHRUNK.

“Also note that in the graphic above, states’ DOMESTIC debt rose from N1.69tn in June 2015 to N3.477tn in June 2018. Adjusting this for USD also does not tell the full story. States debt costs are deducted in Naira equivalent at prevailing “official” rates.


“However, devaluation provides adjusted gains especially for monies earned in USD such as oil & gas revenues but losses for those earned in Naira such as CIT & VAT, when converted to USD.

“We also see that many Nigerians have been on the wrong side of devaluation with income severely shrunk in Naira terms while those who export especially in the non-oil sector have seen relative gains.

“We do not think acquiring debt is bad but we request more TRANSPARENCY on self-liquidating CAPITAL projects that such borrowings are tied to. We believe Nigeria should expand total revenue to at least meet its recurrent costs, in line with the Fiscal Responsibility Act.

“A part of our work is to provide more TRANSPARENCY to the numbers, demand ACCOUNTABILITY and seek CLARIFICATION from PUBLIC institutions when necessary. Thanks and Good Morning Nigeria.”


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