Nigeria’s Total Debt Up By 28% In Two Years Under Buhari, Says BudgIT

Wednesday’s revelation by the Debt Management Office (DMO) that Nigeria’s total debt hit N21.7tr, or about $70.92bn at the end of December 2017, according to BudgIT, an organization committed to raising transparency standards, means that the Federal Government, under President Muhammadu Buhari has bloated the nation’s debt level by N6.1tr or 28% in just two years.
Between December 2016 and the corresponding period of last year, the country’s debt level jumped N4.34tr or 25% up to N21.7tr (about $70.92bn) from N17.36tr, comprising mostly high-interest, locally-acquired credit, Mrs. Patience Oniha, Director-General of the Debt Management Office said at a news briefing on Wednesday.
In a post on its official twitter handle on Thursday morning, BudgIt, which undertakes citizen engagement & accountability especially in public finance in the country, said a summary of the DMO statement shows that Nigeria “added N3.75tn to domestic debt and $7.6bn to external debt.”
Oniha said the country’s domestic debts at the end of December 2017 was N12.59tn; while external Debts amounted to $14.9bn; up from N8.84tr and $7.3bn respectively in 2015, the year Buhari assumed office on May 29.
Nigeria’s total debt at the end of 2017, she noted, comprised mostly high-interest, locally-acquired credit, even as 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.
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, Oniha said.
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.