Nigeria’s total debt rose to N19.2 trillion naira as of March 2017, from N17 trillion, as at the end of 2016, so said the Debt Management Office (DMO) on Monday.
This is another proof that the country is still far from speculation of exit from recession which has rendered most of its key sectors prostrate in the past two years.
A statement from the debt office indicated that the rising debt profile was as a result of the failure of the budget to carter for capital and current expenditures, which recorded about 45 per cent shortfall between the third and forth quarters of the recession year (2016) .
An official of DMO, Kayode Akinyode, explained the reason for the measure put in place by government to shore up the naira.
“You can remember that the naira was sliding to above N500 per dollar until the new monetary-intervention policy of the Central Bank of Nigeria through direct pumping of dollars to both the interbank market and parallel markets, this reduced the foreign reserves, often used to calculate a credit potential of a country.
“But there is hope that the money policy is meant to sustain the numerous economic recovery programme, as captured in the N7.4 trillion budget, which will focus mainly on infrastructure development,” he stated.
The government had planned spending 6.1 trillion naira as part of its bid to increase capital expenditure in 2016, but failure to fund its budget deficit by $2.2 billion saw virtually all projects suffering poor implementation.
He said the deficiency had been captured in the 2017 plan projects, though a deficit of $2.2 billion is still accommodated in it.
Increase in debt had both direct and indirect impact on Nigerian GDP, which has come down in the past two years to about 2.18 per cent in the first quarter of the 2017, which was expected to be the beginning of the country’s exit from recession.
The external component of Nigeria’s debt stood at $13.80 billion at the end of the first quarter, against $11.40 billion at the end of December 2016, the debt office said on its website.
Local debt fell to 11.97 trillion naira, against 13.88 trillion naira 2016, sad the report.
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