The nation’s total indebtedness to foreign and local creditors now stands at N19.16tn, the Debt Management Office has said. This is N1.8tn increase from the N17.36tn recorded at the end of December 2016.
As of March 31, 2015, the country’s total debt stood at N12.06tn. This means the debt level increased by N7.1tn in two years.
Segmenting the national debt, the DMO put the Federal Government’s domestic debt at N11.97tn. Two years ago, as of March 31, 2015, this component of the debt burden stood at N8.51tn.
This means that within a period of two years, the Federal Government has borrowed a total of N3.46tn from domestic creditors. This shows that the domestic debt of the Federal Government has increased by 40.71 per cent.
In the same period, the country’s external debt (for the federal and state governments) rose from $9.46bn to $13.81bn. This means that within the two-year period, the country’s external debt rose by $4.35bn or 45.98 per cent.
The external debt component, however, has been affected by exchange rate variations as the last two years have witnessed noticeable changes in foreign exchange rates.
According to the DMO, the official exchange rate of N306.35 to $1 was used in calculating the country’s external debt for March 31, 2017, while the official rate of N197 to $1 was used in determining the foreign debt for March 31, 2015.
The domestic debt component of the states stood at N2.96tn as of March 31, 2017, up from the figure of N1.69bn at the same time in 2015.
This means that within the period of two years, the domestic debt of the states rose by N1.27tn or 75.15 per cent.
Amidst drying revenues from oil and gas, the government has in the last two years increasingly depended on borrowing even to carry out routine responsibilities.
Although foreign debts are accounted as cheaper than domestic debts, the government has increasingly depended on domestic sources of borrowing as foreign donors place more stringent conditions before granting credit facilities.