- Nigeria’s Total Debt Rises By 7.1tn in Two Years
Nigeria’s debt continued to rise amid an economic downturn and unstable global oil market.
The total debt owes to both foreign and local creditors stood at N19.16tn, according to the Debt Management Office (DMO). This means the country has borrowed N1.8tn this year to take total debt from the N17.36tn recorded at the end of December 2016 to N19.16tn.
Therefore, the country’s total debt has risen by N7.1tn within two years of the current administration when compared with N12.06tn recorded on March 31, 2015.
Breaking down national debts, the Federal Government domestic debt climbed from N8.51tn in 2015 to N11.97tn in 2017. Bringing the total debt borrowed by the Federal Government from domestic creditors within two years to N3.46tn. A 40.71 percent increase.
Within the same period, the nation’s external debt rose from $9.46 billion to $13.81 billion. This is a 45.98 percent or $4.35 billion jumps in foreign debt.
The foreign debt component has been largely affected by the surge in the exchange rate as the last two years have witnessed variation in foreign exchange rates.
According to the DMO, the official government rate of N306.35 to a U.S. dollar was used in evaluating the country’s foreign debt for March 31, 2017, while the official rate of N197 was used in calculating the foreign debt for March 31, 2015.
The domestic debt component of the states stood at N2.96tn as of March 31, 2017, up from the figure of N1.69bn at the same time in 2015.
This means that within the period of two years, the local debt of the states rose by N1.27tn or 75.15 percent.
Therefore, while foreign loans are cheaper than local debts, the government has to depend on local creditors for borrowing as most foreign creditors place more stringent conditions before granting credit facilities to the government.