Nigeria records 37.74percent debt rise

0
1128

Nigeria’s total debt rose by N4.76tn in 2016, the Debt Management Office disclosed in its 2016 Annual Report and Statement of Accounts
It said Nigeria’s debt as of December 2016 stood at N17.36tn, up from N12.6tn a year earlier. This reflects an increase of N4.76tn or 37.74 percent within a period of one year.
The significant increase, according to the DMO, is mainly in the domestic debt component and is attributable to the additional issuance of debt securities to fund the 2016 budget deficit and the refinancing and redemption of matured securities.
The DMO explained that the increase in borrowing could be looked at from the deficits contained in both the 2015 and 2016 budgets in relation to the Gross Domestic Product.
Thus, the deficit contained in the 2016 budget reflected 2.14 percent of the GDP, while that of 2015 reflected 1.09 percent of the GDP.
The report stated that “the domestic stock has continued to form a larger part of the total public debt stock since 2012. The bulk of the stock of external debt continued to be in the long-term category.”
It added, “The increase in public debt stock was due to additional issuances for funding of the 2016 budget deficit at a larger fiscal deficit of 2.14 per cent of GDP compared with 1.09 per cent in 2015, and refinancing/redeeming matured securities, as well as the depreciation of the naira against the dollar as a result of the liberalisation of the exchange rate system.
It said, “In 2016, the government continued to rely on borrowing mainly from multilateral and bilateral sources on concessional terms to finance public development programmes, by addressing critical infrastructure needs, and rebalance the total debt portfolio, so as to achieve the optimal debt portfolio composition of 60:40 for domestic and external debts, respectively in the medium-term.
“In line with the new debt management strategy, there would be a shift of focus to external borrowing, including the international capital market, as a way of diversifying government’s funding sources, reducing debt service costs and creating opportunities for other domestic economic agents to access external financing.”
The report stated that the stock of external debt by remaining maturity was mainly long-term, adding that the increase in the net inflow of funds was largely on account of additional disbursement from multilateral and bilateral sources.
 

LEAVE A REPLY

Please enter your comment!
Please enter your name here