The Nigerian government borrowed N4.365 trillion in 2017, bringing the country’s total debt stock to N21.725 trillion.
The Debt Management Office (DMO) made the disclosure during a press conference in Abuja yesterday.
The new debt stock represents 18.20 per cent of Nigeria’s Gross Domestic Product (GDP) for 2017. This indicates that the debt is sustainable and within the 56 per cent threshold for countries in Nigeria’s peer group, said DMO Director General Patience Oniha.
She noted that the debt consisted of N15.938 trillion domestic borrowings for the Federal Government, the 36 states and the Federal Capital Territory (FCT). This represents 73.36 per cent of the entire debt stock, with the external component consisting of a balance of N5.787 trillion, representing 26.64 per cent.
A further breakdown indicates the domestic debt for the Federal Government was N12.589 trillion, while that of states and the FCT was N3.348 trillion.
On debt servicing, Oniha revealed that N1.617 trillion was expended: N1.476 trillion for domestic debt and N141.72 billion for external debt, representing 91 per cent and nine per cent.
The Federal Government’s portion of the new borrowings was invested in infrastructure delivery, as captured in the 2016 and part of the 2017 capital votes financing, which greatly contributed to the county’s recovery from recession, she said.
“The composition of the debt stock as at the end of 2017 showed that external debt was 26.64 per cent of the portfolio, up from 20.04 per cent in 2016, while domestic debt was 73.36 per cent, down from 79.96 per cent in 2016.
The key benefits of the restructuring of the portfolio are reduction of the government’s debt service costs, lowering of interest rates in the domestic market, and improved availability of credit facilities to the private sector.
“The DMO repaid N198 billion Nigerian Treasury Bills (NTB) in December 2017 with the proceeds of Eurobond issuances. And the DMO has continued further implementation of the strategy in 2018 with the issuance of USD2.5 billion Eurobonds in February 2018, the proceeds of which is being used to repay maturing domestic debt, starting with N130 billion NTBs repaid on March 1, 2018.”
She added: “The borrowings were for financing capital expenditure and stimulating the economy. The funds injected through the borrowings strongly supported the implementation of the Federal Government’s budget, which helped the country to exit recession in 2017.”