Business & Economy - December 31, 2020

Nigeria’s pubic debt climbs to N32.2trn on eve of 2021

Domestic debt stands at N604.19billion

Nigerians bade goodbye to 2020 a new total public debt figure of N32.223 trillion announced by the Debt Management Office (DMO) on Thursday.

The debts management said the latest debt figure for the third quarter of 2020 increased by about N1.214 trillion, or 3.91% from the previous figure of N31.009 trillion as at June 30, 2020.

The latest figure is an equivalent of $84.574 billion, against the country’s external reserves currently at about $35 billion as at November 28, according to the Central Bank of Nigeria (CBN) statistics.

The rising debt, which has been a point of concern among most Nigerians in recent times, highlights the challenges ahead in the new year in the economy.

The DMO said the latest debt stock consists $31.99billion or 37.82% as external debt and N604.19billion, or 62.18% as domestic debt.
Details of the external debt include about $16.74billion, or 52.34% from the multilateral financial institutions; $4.075billion, or 12.74% from the bilateral lending institutions, while the balance of $11.17billion, or 34.93% came from commercial transactions.

Further details showed that Nigeria was indebted to multilateral institutions such as International Monetary Fund (IMF) $3.454billion, and other agencies under the World Bank Group, including the International Development Association (IDA) $10.333billion; the International Bank for Reconstruction and Development (IBRD) $409.74million.

The institutions under the African Development Bank Group included the African Development Bank (AfDB) $1.315billion; Africa Growing Together Fund $0.14million; African Development Fund $931.67million; Arab Bank for Economic Development in Africa $5.88million; European Development Fund $53.92million; Islamic Development Bank $30.66million and the International Fund For Agricultural Development $207.66million.

The bilateral institutions include the China (Export & Import Bank of China) $3.264billion; France (Agence Francaise Development) $502.38million; Japan (Japan International Cooperation Agency) $78.20million; India (EXIM Bank of India) $37million, and Germany (Kreditanstalt Fur Wiederaufbua) $193.26million.

The commercial transactions debts included $10.87billion from Eurobonds and $300million from the Diaspora Bond.

Out of the figure, the Federal Government’s total domestic debt stood at about N15.9trillion. This consisted N11.7trillion or 73.53% from FGN bonds; N2.7trillion, or 17.17% from Nigerian Treasury Bills and N971.9billion, or 6.13% from promissory notes.

Also, the Federal Government debt figures include N362.6billion, or 2.29% from FGN Sukuk; N100.99billion or 0.64% from Nigerian Treasury Bonds; N12.56billion, or 0.08% from FGN Savings Bond, and N25.7billion from the Nigerian Green Bond issue.

The DMO said the Federal and State Governments and the Federal Capital Territory debts all recorded increases due to various borrowings in response to the challenges associated with the COVID-19 pandemic.

The debt management agency said the various debts of the various tiers of government spiked due to their efforts to meet their revenue shortfalls due to declining revenue inflows over the period.

The issuance of Promissory Notes by the FGN to settle inherited liabilities of some of its agencies, the DMO said, also contributed to the rising public debt Stock since the year 2018 when they were first issued.

About N20.136 billion of Promissory Notes were issued in the third quarter of 2020, the DMO said, adding that the outstanding Promissory Notes were all included in the Domestic Debt Stock.

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