The Debt Management Office said Nigeria’s debt burden rose by N1.31tn in one year, according to a report monitored by The Punch.
On Wednesday in Abuja, the DMO released official statistics that showed how the country’s total debt rose from N11.24tn as of December 31, 2014 to N12.6tn at the end of 2015.
Nigeria’s debt rose by 12.1 per cent within a period of one year following the N1.31tn increase.
As of June 30, 2015, the country’s debt burden stood at N12.12tn. This means that the federal and state governments grew the country’s debt profile by N480bn in the first six months of last year. The total is made up of the external debt of the federal and state governments, the domestic debts of the Federal Government as well as the domestic debts of the states.
In terms of segmentation, the external debts of both tiers of government rose from $9.71bn as of December 31, 2014 to $10.71bn as of December 31, 2015. This shows a rise of $1bn or growth rate of 10.37 per cent within the period.
The domestic debt of the Federal Government, which is the biggest component of the debt burden, rose from N7.9tn as of December 31, 2014 to N8.84tn in the 12-month period.
This shows that the domestic debt of the Federal Government rose by N932.97bn within the one-year period. It also means that the domestic debt of the Federal Government rose by 11.8 per cent.
For 2016, the Federal Government expects to borrow N984bn from domestic sources and N900bn from foreign sources to finance the capital component of the budget. It will also set aside the sum of N113bn as a sinking fund towards the retirement of maturing loans, while N1.36tn has been provided for foreign and domestic debt service obligations.
The Punch also reported that the Federal Government spent a total of N2.95tn to service domestic debts for a period of five years from 2010 to 2014. The amount spent on servicing the domestic component of Nigeria’s total debt rose from N334.66bn in 2010 to N846.64bn by the end of December 2014.
The increase in the debt service obligation of the Federal Government showed an increase of N511.98bn within a period of five years. This means that in that time, the country’s domestic debt service obligation rose by 152.99 per cent.
The increase also reflected the rise in the size of the country’s domestic debt portfolio, which moved from N4.55tn in December 2010 to N7.9tn as of December 31, 2014, an increase of 73.63 per cent.
This means that while the domestic debt rose by 73.63 per cent within the period, the cost of servicing the debt rose by 152.99 per cent. Some of the debts that had fallen due within the period, however, might have been liquidated.