Statistics provided by the Debt Management Office says Nigeria’s total debt stock rose by N8tn between September 2015 and September 2017.
The DMO said the country’s total debt stock as of the end of September this year stood at N20.37tn, while the figure at the same period in 2015 stood at N12.36tn.
This means that within a period of two years, the country’s total debt exposure rose by N8.1tn. In terms of percentage increase, the country’s total debt rose by 64.81 in the period.
As of 2015, the external loan component of the country’s total debt stood at N2.09tn. However, as of September 30, 2017, the external debt component stood at N4.60tn.
This means that the external debt component rose by N2.6tn or 124.4 per cent.
The domestic debt component of the total debt, on the other hand, rose from N10.27tn as of September 2015 to N15.68tn the same time this year.
This means that within the two-year period, the domestic debt rose by N5.41tn. In percentage terms, the domestic debt increased by 52.68 per cent.
Although the external debt component of the total debt increased by a higher proportion, the debt statistics as of September 2017 show that the domestic debt, with its high cost of servicing, still dominates the country’s borrowing pattern.
However, the growth in the external debt component may reflect the Federal Government’s move to take more foreign loans as against the acquisition of more costly local debts.
The Federal Government is actually in a process of taking a $3bn foreign loan to refinance some local debts that are matured and another $2.5bn to finance the deficit in the 2017 budget.
In a statement issued by the DMO in Abuja on Tuesday, it said the Federal Government would save N91bn on local debt servicing if it secured the $3bn to refinance the local debts.
It added that the Federal Government would save another N75bn in debt servicing if it got $2.5bn from foreign sources to finance the gap in the 2017 budget rather than from local sources.
These add up to N166bn savings in debt servicing through external financing compared with local financing.
The statement also highlighted the marginal increase in the nation’s total debt portfolio when compared to the status as of June.