AfDB, other loans raise Nigeria’s debt profile 20.5% in 4 months

Nigeria’s debt profile has risen to $13.5 billion in September, from $11.26bn in June 2016, recording an increase of 20.5 per cent within four months.

According to statistics obtained from the DMO on Monday, the country’s high debt profile took such an unprecedented jump because of current economic recession, which has seen the 2016 budget suffering from $2.2 billion deficits.

The government is said to have topped up its local and foreign loans intake since May 2016, including the Chinese $6billion special loan deal and the recent African Development Bank (AfDB) $1billion facility for the budget, and which the Ministry of Finance was said to have already accommodated in the country’s approved loans’ repayment schedule.

But economists say the debt profile will continue to grow until policy makers find lasting solutions towards diversifying Nigeria’s economy, currently devastated by fall in price of crude oil in the international market.

However, a DMO official said there was no cause for alarm as most of the loans were obtained at very good conditionalities and with long term servicing.

Read also: Nigeria to shore up foreign reserves with $15bn India oil deal

“Nigeria’s debt profile is still within the expected range of a developing country and in recession too; the US, despite its strong economic status, still runs its economy on deficit,” said a DMO spokesman.

A breakdown of Nigeria’s debt-record at a glance shows that external debts stood at $13.51 billion as of September 30, 2016 as against $11.26billion by July last year.

But experts still maintained that if there is no check on the desire to go for loans, by the end of 2016 fourth quarter, Nigeria would have added 40 per cent to its present loan profile, which will see the economy mortgaged for a longer time to come.

Minister of Finance, Kemi Adeosun, said the country would not take any foreign loan that will not give needed relief to its citizens.

To her, the promised $1.8billion loan from IMF is not yet considered as part of series of loan facilities for the country because of the stringent conditions attached to it.

By Emma Eke.

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