Nigeria’s external debt rapidly increasing under Buhari

According to the report by the DMO, Nigeria’s total debt stock now stands at N12.12tn ($63.81bn).

The report by implication shows that the external debt profile has increased by $860m (9.09%) within the period of three months since Buhari took over.

A year ago (that is, June 30, 2014), the country’s total debt stock stood at N10.43tn. This means that within a 12-month period, the country’s debt stock had increased by 16.2 per cent, adding N1.69tn.

Statistics obtained showed that the domestic debt stock of the Federal Government as of June 30, 2015 stood at N8.39tn or $42.63bn, against last year figure which stood at N7.42tn implying that within a one year period, the domestic debt of the Federal Government rose by N970bn or 13.07%.

Also, country’s domestic debts of the 36 States of the federation and the Federal Capital Territory Administration, stood at N1.69tn ($10.86bn) at the end of June 2015.
The report disclosed that Federal Government Bonds accounted for N5, 300,418,821,000 or 63.13% of its domestic debt.

The Nigerian Treasury Bills accounted for N2, 824,952,245,000 or 33.64% of the Federal Government’s total domestic bill, while Treasury bonds accounted for N271, 220,500,000 or 3.23% of the Federal Government’s domestic bill.

In the external sector, multilateral donors accounted for 70.11% of the country’s external debt, while bilateral sources accounted for 15.35%.
Commercial debts accounted for 14.54% of the nation’s external debt.

In line with the nation’s dwindling resources as a result of falling oil prices, there are indications that borrowing will continue to play a major role in the funding of both the Federal and State Governments.

During his recent official visit to the United States, President Muhammadu Buhari sealed deal providing $2.1bn funding from the World Bank for the rebuilding of the N/east devastated by Boko Haram insurgents.

As the DMO continues to borrow for the government on monthly basis through the instrument of the FGN Bonds, experts have advised the government not to borrow to pay salaries or any other recurrent expenses.

Recall that the Debt Management Office said the Federal Government had earlier disclosed that it was planning to borrow between N180bn and N240bn through the sale of government bonds in the third quarter.

According to the DMO, the amount will be borrowed through the issuance of five and 20-year bonds.

It had raised N210.22bn ($1.1bn) through government bond sales in the second quarter and is also planning to sell the 15.54% 2020 bond at auctions in July, August and September with N35bn to N45bn on offer each month.

The DMO said it would also offer the 12.1493% 2034 bond in July, August and September with N25 to N35bn on offer each month.