- Nigeria’s Debt Rises by 5% to N25.7trn in H1, 2019
Nigeria’s total debt rose by 5.11 percent in the first half of 2019 to N25.7 trillion, according to the Debt Management Office (DMO) report released on Tuesday.
Analysis of Nigeria’s debt revealed that national debt rose by 2.3 percent or 560 billion from N24.387 trillion recorded in December 2018 to N24.947 trillion in the first quarter of 2019.
While in the second quarter of the year, April to June, the total debt grew by another 2.9 percent or N754 billion from N24.947 trillion to N25.701 trillion.
Therefore, in the first half (H1) of the year, Nigeria’s total debt rose by N1.31 trillion or 5.11 percent.
A breakdown of the DMO report shows the country’s outstanding foreign debt stood at N8.322 trillion and account for 32.38 percent of the total debt. Local outstanding debt was N17.379 trillion and represents 67.62 percent, the largest source of government funding.
Meanwhile, the International Monetary Fund (IMF), has said the rising cost of servicing Nigeria’s debt necessitates an increase in the tax rate in order to offset the tax burden.
Mrs. Cathy Pattillo, the Assistant Director, Fiscal Affairs Department, IMFm said the focus should be on how to increase non-oil tax revenue.
This she attributed to the fact that Nigeria’s interest payments as a share of tax were very high.
Cathy added, “On Nigeria, the priority is a comprehensive reform to increase non-oil tax and there are a number of reasons this will contribute to creating space for important spending in infrastructure and human development spending.
“For Nigeria, this is very important for a number of reasons. One, because right now, interests payment as share of tax are very high around a third of overall and two-thirds for the Federal Government.
“And that is because interest payments are particularly high because the denominator is incredibly low. Nigeria has one the lowest tax ratio in the world and it is not because Nigeria doesn’t have big development problems but because the challenge is that Nigeria has a lot of needs for education and health spending.
“It has some very low indicators in that area and in demographic projection. Nigeria has been projected to be by 2050 the third most populous country in the world. So, addressing those challenges is really important.”
