Pix: Patience Oniha, DMO DG

Nigeria’s total national debt increased by N4.34tr or 25% in one year to N21.7tr (about $70.92bn) at the end of December 2017, from N17.36tr at the end of 2016, comprising mostly high-interest, locally-acquired credit, Mrs. Patience Oniha, Director-General of the Debt Management Office said at a news briefing on Wednesday.
The country’s first Eurobond will be repaid at maturity in July, she said, putting the debt mix at about 27% foreign and 73% local, which it plans to cut to 40:60%, after the $2.5bn Eurobond sale in February, in a bid to increase the ratio of foreign, but cheaper to service dollar, to domestic debts.
This is even after Nigeria paid off about N130bn worth of treasury bills maturing this week, instead of rolling over the debt as it has done in the past.
Eurobond sales last year boosted foreign reserves by $4.8 billion, in addition to February’s $2.5 billion gain, Reuters reported Oniha as saying.
The Federal Government is also expected to save N81.66bn after it refinanced $3bn of Treasury Bills, she said.
“The key benefits of the restructuring of the portfolio are the reduction of the government’s debt-service costs, lowering of interest rates in the domestic market and improved availability of credit facilities to the private sector,” Oniha said.
In 2017 the government spent N1.6tr out of a budget of N7.2tr on debt servicing, with only 9% of that for external borrowing and the rest spent on local loans, according to the DMO.
The DMO repaid N198bn of maturing domestic debt at the end of last year with the proceeds of its Eurobond sales to rein in the increasing cost of credit, Oniha said.