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In the Midst of a Devastating Pandemic, Nigeria’s Public Debt Spikes

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The Debt Management Office (DMO) announced on Wednesday Nigeria’s total public debt has increased by about N2.38 trillion, or $6.593billion, as at June 30, 2020. The DMO, an agency which provides data on the status of the country’s debts, says that the total debt portfolio grew from about N28.628 trillion, or $79.303 billion, as at March 31 to over N31.009 trillion, or $85.897 billion as at June 30, 2020.

The DMO said that about $3.36 billion came from Budget Support Loan received the International Monetary Fund (IMF), while the rest comprises new domestic loans taken to finance the revised 2020 Appropriation Act.

These new instruments include a N162.557 billion Sukuk and promissory notes issued to settle claims of exporters. The total external debt now stands at about N11.363 trillion, or $31.477 billion, about 35.65 per cent of the overall outlay, against total domestic debt of about N19.945 trillion, or $54.419 billion, about 63.35 per cent of the total portfolio.

The federal government accounted for N9.824 trillion, or $27.214 billion (about 31.6 per cent) of external debts; and N15.456 trillion, or $42.814 billion (about 49.84 per cent) of the domestic debts.

The states and the Federal Capital Territory collectively owe about N1.539 trillion, or $4.263 billion (about 4.96 per cent) of the total external debts and about N4.190 trillion, or $11.606 billion, (13.51 per cent) of the total domestic debts.

The DMO said it expected the Public Debt Stock to grow as it expects additonal loans from the World Bank, the African Development Bank and the Islamic Development Bank to finance the 2020 Budget.

The fundamentals and benchmarks in the 2020 Appropriation Act were revised following the devastating effects of the novel coronavirus on the government’s revenues in addition to costly interventions in the health sector and a massive economic emergency stimulus.

The DMO said that promissory notes would be issued in the course of the year, in addition to new debts to be issued by states which would further increase the public debt stock.

The details of the country’s total debt revealed that the multilateral loans category consisted IMF $3.359 billion, while the World Bank Group and African Development Bank (AfDB) Group $16.36 billion. The three financial institutions accounted for about 52 per cent of the country’s total $31.477.14 billion debt stock.

The breakdown of the debt to World Bank’s affiliate institutions showed that the country owes the International Development Association (IDA) $10.05 billion; and the International Bank for Reconstruction and Development (IBRD) $409.51 million.

Similarly, the debt to African Development Bank stands at about $1.326 billion; Africa Growing Together Fund $0.14 million; African Development Fund $921.91 million; Arab Bank for Economic Development in Africa $5.88million; European Development Fund $52.52million; Islamic Development Bank $30.22million, and International Fund For Agricultural Development $201.68million.

Nigeria’s total debt to various institutions, when viewed from a bilateral viewpoint, is about $3.949 billion, or 12.54 per cent of the total debt stock.

They comprise loans taken from Chinese financial institutions, including a $3.241billion loan from China’s EXIM Bank; $403.65 milion from France-based lender Agence Francaise Development ; $76.69million from the Japan International Cooperation Agency ; $34.87million from the EXIM Bank of India and $192.71 million from Germany’s Kreditanstalt Fur Wiederaufbua) .

The breakdown includes commercial debt instrument debts totaling $11.16.35 billion, which account for about 35.48 per cent of the country’s total debt, such as $10,868.35bilion in Eurobonds and a Diaspora Bond of $300million.

Additional details of the total N15.456 trillion Federal Government debt stock by instruments of as at the date under review showed that FGN Bonds of N11.241 trillion, or 72.75 per cent; Nigerian Treasury Bills N2.760trillion, or 17.86 per cent; Nigerian Treasury Bonds N100.988 bilion, or 0.65 per cent; FGN Savings Bond $12.984billion, or 0.08 per cent; FGN Sukuk N362.557billion, or 2.35 per cent, Green Bond N25.690billion, or 0.17 per cent, and Promissory Notes N951.740billion, or 6.16 per cent.

The details of the debts stock of the thirty-states and the Federal Capital Territory stood at about N4.190 trillion, with Lagos having debts of N493.32 billion; Rivers: N266.94 billion, Akwa Ibom: N239.21billion and Delta: N235.86 billion.

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