Nigeria’s debt burden rose by N1.31trn in one year, the Debt Management Office has said. This means the country’s debt profile rose by 12.1 per cent.
Official statistics released by the DMO in Abuja on Wednesday showed that the country’s total debt rose from N11.24trn as of December 31, 2014 to N12.6trn as of December 31, 2015.
As of June 30, 2015, the country’s debt burden stood at N12.12trn. This means that the governments that took the reign of government at both the federal and state levels grew the country’s debt profile by N480bn in the first six months.
The total debt is made up of the external debt of the federal and state governments, the domestic debts of the Federal Government and the domestic debts of the states.
In terms of segmentation, the external debts of both tiers of government rose from $9.71bn as of December 31, 2014 to $10.71bn as of December 31, 2015. This shows a rise of $1bn or growth rate of 10.37 per cent within the one year period.
The domestic debt of the Federal Government which is the biggest component of the debt burden rose from N7.9trn as of December 31, 2014 to N8.84trn as of December 31, 2015.
This shows that the domestic debt of the Federal Government rose by N932.97bn within the one year period. It also means that the domestic debt of the Federal Government rose by 11.8 per cent within the one year period.
The 36 states of the federation and the Federal Capital Territory held $3,369,911,154.54 of the country’s external debt component while the Federal Government external commitment stood at $7,348,520,340.26.
With $1,207,900,597.65, Lagos remained the most externally indebted state of the federation. This means that 35.84 per cent of the country’s subnational external debt is held by Lagos State.
For 2016, the Federal Government expects to borrow N984bn from domestic sources and N900bn from foreign sources to finance the capital component of the 2016 expenditure.
It also set aside the sum of N113bn as Sinking Fund towards the retirement of maturing loans; while N1.36trn was provided for foreign and domestic debt service obligations.
Our correspondent reported that the Federal Government spent a total of N2.95trn to service domestic debts for a period of period of five years spanning from 2010 to 2014.
The amount spent on servicing the domestic component of Nigeria’s total debt rose from N334.66bn in 2010 to N846.64bn by the end of December 2014.
The increase in the debt service obligation of the Federal Government showed an increase of N511.98bn within a period of five years. This means that within the period, the country’s domestic debt service obligation rose by 152.99 per cent.
The increase also reflected the increase in the size of the country’s domestic debt portfolio which rose from N4.55trn as of December 2010 to N7.9trn as of December 31, 2014, an increase of 73.63 per cent.
This means that while the domestic debt rose by 73.63 per cent within the period, the cost of servicing the debt rose by 152.99 per cent. Some of the debts that had fallen due within the period, however, might have been liquidated.