Nigeria’s public debt stock rose by N736 billion to hit N20.373 trillion from N19.637 trillion recorded as at September 30, 2017. The 3.6 per cent marginal rise in the country’s total debt stock, comprising the federal government, states and Federal Capital Territory, was revealed by the Debt Management Office, DMO.
A breakdown of the debt stock shows that domestic debt accounted for 76.96 per cent, while external debt accounted for 23.04 per cent.A further breakdown showed that domestic debt stock was N15.679 trillion, which is an increase of 4.1 per cent compared to N15.034 trillion as at June 30, 3017. On the other hand, external debt stock stood at N4.694 trillion, a marginal rise of 1.9 per cent above the N4.602 trillion figures as at June 30, 2017. Analysis showed that Nigeria is more indebted domestically and this explains why the Federal Government sought for National Assembly’s nod to borrow $5.5 billion with low interest rates externally to settle domestic loans and reduce its debt servicing burden. The amount, which comprises of USD2.5 billion new borrowing to part finance the N2.322 trillion deficit in the 2017 Appropriation Act and USD3.0 billion to repay maturing domestic debt, is expected to achieve a reduction in interest costs of about N75 billion and N91 billion respectively, when compared to the interest cost of borrowing in Naira in the domestic market. The strategy will also contribute to attaining the target ratio of 60:40 between domestic and external debts. According to the Debt Management Office, other benefits of this strategy include increased availability of funds to the private sector and lower domestic lending rates both of which will enable the private sector contribute to growth, as well as, higher level of external reserves to support the naira exchange rate.