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Published On: Wed, Aug 15th, 2018

Nigeria’s Total Debt increases marginally by 3.01% – DMO

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By Etuka Sunday

The Debt Management Office (DMO) has disclosed that the public debt stock of the country increased marginally by 3.01%.
Recall, the total debt of the country stood at N21. 73Trillon as of December 31, 2017. However, DMO yesterday said that the total debt stock as at June 30, 2018, was N22.38 Trillion or USD73.21 Billion, leaving an increase of 3.01%.
Briefing newsmen in Abuja, in a presentation, the DMO’s Director General, Ms Patience Oniha said that the increase in the Public Debt Stock over the 6 months period was due largely to the USD2.5 Billion Eurobond issued in February 2018.
However, “when compared to the Debt Data for March 2018, the Public Debt Stock actually decreased by 1.44% from N22.707 Trillion in March 2018 to N22.38 Trillion in June 2018.
“The decrease was due to a 3.38% decline in the FGN’s Domestic Debt Stock between March and June 2018.
“There were however marginal increases of 0.07% in the External Debt Stock and 2.75% in the Domestic Debt of States”, she said.
The DG said, a major highlight in the Public Debt Data was the consistent decrease in the FGN’s Domestic Debt which declined from N12.589 Trillion in December 2017 to N12.577 Trillion in March 2017 and N12.151 Trillion in June 2018.
According to her, the reduction in the FGN’s Domestic Debt Stock arose from the redemption of N198 Billion Nigerian Treasury Bills in December 2017 and another N639 Billion between January and June 2018.
It will be recalled that a total of USD3 Billion was raised through Eurobonds to refinance maturing domestic debt as part of the implementation of the debt management strategy for the purpose of substituting high cost Domestic Debt with lower cost External debt to reduce Debt Service Costs for the Government.
The DMO explained that the implementation of the Public Debt Management Strategy whose overall objective is to ensure that Nigeria’s debt is sustainable, is already yielding positive results. One of the beneficial outcomes is the rebalancing of the Debt Stock; the Ratio of Domestic Debt to External Debt inching towards the target of 60:40 and the target of 75:25 between Long Term Domestic Debt and Short Term Domestic Debt.
According to the figures for June 30, 2018 released by the DMO, the Ratio between Domestic and External Debt stood at 70:30 compared to 73:27 in December 2017.
Similarly, the Ratio between Long Term Domestic Debt to Short Term Domestic Debt was 76:24 in June 2018 compared to 72:28 in December 2017.
The DMO reported that its activities have resulted in lower interest rates for the Benchmark FGN Securities from about 18.5% in January 2017 to 11-14% in the first half of 2018.
Also, with the redemption of about N840 Billion of Nigerian Treasury Bills more funds were available for lending by banks to the Private Sector. External capital raising activities also contributed to the increase in External Reserves.

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