DMO insists no red flags as debt stock rises to N21.7trn

Nigeria ‘s public debt stock rose to N21.725 trillion  as at December 31, 2017, with the debt to GDP settling at  18.20 percent, Patience Oniha, Director General of the Debt Management Office (DMO) confirmed on Wednesday.

Figures which she presented to the press in Abuja showed that Domestic Debt for the Federal Government wasN12.589 trillion, while the Domestic Debt of States and the FCT stood N3.348 trillion. The External Debt of the Federal Government, States and the FCT, on the other hand, recanted N5.787 trillion, according to her.

The Total Public Debt as at December 31, 2017 represents 18.20% of Nigeria’s GDP for 2017. This shows that Nigeria’s debt continues to be sustainable and is well within the threshold of 56% for countries in Nigeria’s peer group.

Nigeria’s has embarked on a new Debt Management Strategy, which aims at reducing the ratio of Domestic Debt, which government thinks is costlier, as a share of total debt portfolio, while raising External Debt in a 60 to 40 ratio.

“This target is being achieved,” Oniha said as she briefed the press.

The composition of the Debt Stock as at the end of 2017 showed that External Debt was 26.64% of the portfolio, up from 20.04% in 2016, while Domestic Debt was 73.36%, down from 79.96% in 2016.

The government thinks that restructuring its debt portfolio could help it reduce soaring Debt Service Costs, interest rates in the domestic market and improved availability of credit facilities to the private sector.

The DMO repaid N198 billion Nigerian Treasury Bills in December 2017 with the proceeds of Eurobond issuances and has also issued $2.5 billion Eurobonds in February 2018.

“the proceeds is being used to repay maturing domestic debt, starting with N130 billion NTBs repaid on March 1, 2018,” the DG stated.

She said the new borrowings are for financing capital expenditure and stimulating the economy, and that the funds injected through the borrowings strongly supported the implementation of the Federal Government’s Budget which helped the country to exit recession in 2017.

Reacting to concerns over the excessive borrowing by government, the DG maintained, “Nigeria’s debt continues to be sustainable and is well within the threshold of 56% for countries in Nigeria’s peer group.”

Details later…