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6 Jun 2017

It's Getting Worse! Nigeria’s Debt Rises By N7.1tn In Two Years

The nation's total
indebtedness to foreign and
local creditors now stands at
N19.16tn, the Debt
Management Office has said.

This is N1.8tn increase from the N17.36tn recorded at the
end of December 2016, Punch
reports. As of March 31, 2015, the country's total debt stood at
N12.06tn. This means the debt level increased by N7.1tn in two years.
Segmenting the national debt, the DMO put the Federal Government's
domestic debt at N11.97tn. Two years ago, as of March 31, 2015, this
component of the debt burden stood at N8.51tn.

This means that within a
period of two years, the
Federal Government has
borrowed a total of N3.46tn
from domestic creditors. This
shows that the domestic debt of the Federal Government
has increased by 40.71 per
cent. In the same period, the
country's external debt (for
the federal and state
governments) rose from
$9.46bn to $13.81bn. This
means that within the two- year period, the country's
external debt rose by $4.35bn
or 45.98 per cent. The external debt component,
however, has been affected
by exchange rate variations
as the last two years have
witnessed noticeable
changes in foreign exchange rates. According to the DMO, the
official exchange rate of
N306.35 to $1 was used in
calculating the country's
external debt for March 31,
2017, while the official rate of N197 to $1 was used in
determining 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
domestic debt of the states
rose by N1.27tn or 75.15 per
cent. Amidst drying revenues from
oil and gas, the government
has in the last two years
increasingly depended on
borrowing even to carry out
routine responsibilities.

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