THE nation’s total public Debt stock, comprising the debts of the Federal Government, states as well as the Federal Capital Territory, hit N20.373 trillion at the end of September, the Debt Management Office (DMO) has said.
This represents a 3.6 per cent increase from the N19.637 trillion as of June 30, 2017
A breakdown of the Debt Stock provided by the DMO shows that domestic debt accounts for 76.96 per cent, while external debt accounts for 23.04 per cent.
The statement added, “Domestic debt stock was N15.679 trillion, which is an increase of 4.1 per cent compared to N15.034 trillion as at June 30, 3017. On the other hand, external debt stock stood at N4.694 trillion, a marginal rise of 1.9 per cent above the N4.602 trillion figure as at June 30, 2017.”
DMO stated that the resolve of the government to mitigate the effect of the huge domestic debt on the economy informed the decision to raise external funds of $5.5billion.
According to the statement, “The amount comprises of $2.5 billion new borrowing to part finance the N2.322 trillion deficit in the 2017 Appropriation Act and $3 billion to repay maturing domestic debt, is expected to achieve a reduction in interest costs of about N75 billion and N91 billion respectively, when compared to the interest cost of borrowing in naira in the domestic market. The strategy will also contribute to attaining the target ratio of 60:40 between domestic and external debt.”
According to the Debt Management Office, other benefits of raising external loan to fund the local debts include, “increased availability of funds to the private sector and lower domestic lending rates both of which will enable the private sector contribute to growth, as well as, higher level of external reserves to support the naira exchange rate.”
