A study commissioned by ActionAid Nigeria has revealed that the country’s external debt stock increased by 410.9 per cent between 2012 and 2020, with the highest year-on-year growth recorded in 2017 at 65.82 per cent, followed by 35.16 per cent growth in 2013 and 33.63 per cent in 2018.
Presenting the report during a one-day National Dialogue on Nigeria’s Rising Debt Profile, convened by ActionAid Nigeria, with the theme: ‘The Rising Public Debt in Nigeria and the Challenges for National Development’, the lead consultant of Centre for Social Justice, Eze Onyekpere, who led the team, said the country’s domestic debt component grew by 209.1per cent within the period of study.
“The highest year-on-year increse was recorded in 2013 with a 32.63 per cent growth, followed by 32.30 per cent in 2016 and 14.82 per cent in 2017. External debt stock grew more than the domestic debt stock during the study period”, he said.
Onyekpere noted that Federal Government’s component of the external debt stock between 2014 and 2018 calculated in US dollar grew by 226.47 per cent, while the same amount calculated in naira grew by 496.6 per cent.
“The states and FCT external debt stock calculated in USD grew by 29.5 per cent, while the calculation in naira produced 136.7 per cent growth. The external debt component had risen to 31.82 per cent of overall debt as at end of 2018, while the domestic debt was 68.18 per cent of overall debt. Furthermore, Nigeria’s debt to GDP has been growing over the years and stood at 19 per cent by end 2018.”
Onyekpere said the Central Bank of Nigeria (CBN) and banks are heavily exposed to these domestic instruments up to 45.2 per cent of overall and the non-bank public is mainly about Pension Fund Administrators, Asset and Fund Managers, as well as Insurance companies hold the remaining part.
“The current debt to retained revenue profile of about 83 per cent is not sustainable. The drive to raise new domestic revenue is a struggle of the generation and it should attract the energy, vision and vigour of both government and citizens. The major driver should be a commitment to expand available resources, rather than the current clamour for sections of the country to have more of the stagnant pool of available resources. Debt can be reduced if we generate more revenue.”