Director-General of the Debt Management Office (DMO), Ms. Patience Oniha, on Wednesday said Nigeria’s public debt stock rose to N35.465 trillion as of June 30, representing N2 .358 trillion higher than the stock value at the end of the first quarter this year.
Available data by the DMO on the nation’s debt stock indicated that as of March 31, 2021, Nigeria’s total public debt stock was N33.107 trillion, or USD87.239 billion.
Oniha, who made the disclosure in a virtual media chat, expressed concerns that the country would face the challenge of debt sustainability if governments failed to raise their low revenue profiles, which currently make Nigeria the poorest among its peers globally.
She canvassed: “We should focus on revenue. The good thing about it is that the Minister of Finance, Budget and National Planning has started a programme aimed at growing the revenue profile. We must discipline ourselves to follow through to grow our revenue.
“If we continue to borrow and do nothing about growing our revenue base as other countries have done, we may have a debt sustainability challenge”, the debt management expert added.
Oniha further explained that the issues of rising debt, high debt service to revenue ratio and utilization of borrowed funds were critical to ensuring debt sustainability for the country.
On why Nigeria’s public debt stock continued to surge over the past few years, the Director General attributed the development to “huge infrastructure deficit, recessionary trends in the economy which have occurred twice in the last six years, consecutive budget deficits, low revenue base accentuated by over-dependence on one source of revenue – crude oil, which prices have remained much more volatile in the past two years due to the COVID-19 pandemic.
While urging Nigerians to support current efforts by the federal and state governments to boost non-oil revenue, Oniha lamented that tax accounted for a mere 5% of the nation’s Gross Domestic Product (GDP) and totally undesirable for Nigeria, particularly in view of development programmes requiring urgent funding. and that concerted efforts must be made to increase the nation’s revenue.
Further analysis of the debt stock on domestic and foreign loans showed that external debt stood at N13.711 trillion, or 38.66% while the domestic debt rose to N21.754 trillion as at the end of the Q2, 2021, representing 61.34% of the entire stock.
Also, when analyzed based on tiers of government’s liabilities, the Federal Government’s foreign debt stood at N11. 828 trillion compared to the N17. 632 trillion domestic share. States and FCT’s external debt stock totaled N1.883 trillion while their domestic debt stock rose to N4.122 trillion.
A breakdown of external debt stock showed that two multilateral institutions, namely the World Bank Group and African Development Bank Group (AfDB) provided 54.88% of Nigeria’s public debt.
The two institutional creditors’ loans are followed by Commercial debt (Eurobonds and Diaspora bonds) which accounted for 31.88% of the stock, followed by bilateral debt from China, France, Japan, India, and Germany representing 12.70% and Promissory Notes 0.54% of the total debt stock
