Nigeria’s debt profile increased by 15% in 2016 to N17.4tn –DMO

Nigeria’s total debt rose from N12.60 trillion ($51.75 billion) in December 2015, to N17.36 trillion ($56 billion), estimated at 15 per cent increase, as at December 2016, according to the Debt Management Office (DMO).

In its latest update on the loan status of Nigeria, posted on its website: www.dmo.ngov.fgn-debt, DMO said 20 per cent debt marginal increase of the country’s debt, as at 2015 was part of a carry-over of total debt amounting to about $10.7 billion, from about $8.56 billion the year before.

“The debt profile was worsened by the economic downturn that hit Nigeria, beginning from the end of 2015, and which culminated into recession that saw the country grappling with its side effect from the first quarter of the preceding year (2016),” the site informed.

Not able to implement its 2016 budget, held down by $2.2 billion deficit, the idea of raising loans from known creditor agencies was met with some challenges.

The situation is also feared might be faced in running the 2017 budget with deficit of $2.36 billion.

Read also: DMO to sell monthly bonds in 2017, N130bn planned for March

But the difference being that half of the 2017 deficits will be funded through domestic borrowings, said the debt office.

DMO has maintained that stargard bonds and bills sales in 2017 are for the funding of the two budgets.

But Mr. Felix Dubani, an international analyst with PCW Company, was recently quoted as telling a business seminar in Lagos, that despite the aim geared towards realizing enough funds from the bonds, marketed locally, their yields were below, compared to the ones sold abroad.

He said the local bonds were being used primarily to fight rising inflationary trends, believed in government quarters to have resulted from too much liquidity in the system.

To butress this fact, Nigeria has in December 2016 received foreign bonds and loans yields, totalling about $11.40 billion .

But its local bonds rose to N13.88 trillion, in 2016, as against its figure of N8.83 trillion in 2015 and with the fear that it will rise further.

It will be recalled that Nigeria said that it would raise about $4.63 billion at its third domestic debt sale on March 15 and sell $12.13 billion worth of treasury bills by the second quarter of 2017.

It sold a $1 billion Eurobond last month and wants to sell another for $500 million. The government aims to issue a $300 million diaspora bond abroad before end of September 2017 from its first sovereign Islamic bond deal, known as Sukuk in the local market.

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