Nigeria, Africa’s largest economy, had last year incurred an additional N14.5 trillion debt. This followed the decision of the Central Bank of Nigeria to convert the N10 trillion given to the federal government during the period to a loan with 30-year tenor.
Patience Oniha, director-general of the Debt Management Office (DMO), disclosed this at a virtual stakeholders’ meeting, on Thursday.
Nigeria’s public debt stock stood at N32.22trn as at September 30, 2020, according to figure published on DMO website. With the additional N10 trillion the debt stock of Africa’s largest economy is now N42 trillion.
This is a 53 percent increase from the N27.4 trillion as at December 2019.
“We have reached fairly advanced stage in the ways and means balances at the Central Bank,” Oniha said.
Ways and means is the government overdraft facility with the Central Bank, which the DMO has been trying to manage for some time, she explained.
“I think from 2018 we actively started looking at it and we are at that point where all we need is to finalise one term with the CBN and we are good to implement.
“The figure we worked on is about N10 trillion and it is going to be added to the debt stock. So far it is not added. It is not like credit that we negotiated, so it is an overdraft managed by the accountant general,” the DMO director-general said.
“So the process we are going through now will be structured. The offer we made to the CBN is to convert it to 30-year facility, you know, amortising. We will not have N10 trillion in one day to pay. So that will come unto the debt stock, that means if you add only that N10 trillion, we are already at N42 trillion using our September 2020 period. So that is another reason for the 40 percent debt to Gross Domestic Product (GDP),” she said.
By David Ibemere…
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