Nigeria’s debt stock rises by N49 billion

The nation’s debt stock is again rising after a temporary decline in the second quarter of 2018, settling at N22.43 trillion, with N49.14 billion rise in the third quarter.

The amount, which represents 0.22 per cent increase in the obligations’ profile, was recorded after the second quarter statistics showed a decline to N22.37 trillion, from N22.71 trillion in the first quarter of the year.

The Debt Management Office (DMO), in its third quarter report, said there was an increase across all debt categories, except in the external debt segment, which comprises the Federal Government, states and Federal Capital Territory (FCT).

Specifically, the external debt component fell to $21.59 billion (N6.61 trillion) in the period under review, from $22.08 billion (N6.75 trillion) in the second quarter.

The Federal Government’s domestic debt profile rose to N12.29 trillion ($40.1 billion) in third quarter from N12.15 trillion ($39.7 billion) three months ago, while those of the states and FCT also rose from N3.47 trillion ($11.4 billion) to N3.53 trillion ($11.5 billion) in third quarter.

The new increase, no doubt, has cost implications, as the country’s revenue-to-debt service ratio has elicited local and international discourse, even as multilateral institutions like the World Bank and International Monetary Fund (IMF) declared it unsustainable, calling for deepening of tax collections for immediate support.

Despite government’s effort to reduce its cost of funds, by retiring part of the domestic obligations using proceeds of the previous Eurobonds, it embarked on domestic borrowing in the third quarter to support the 2018 budget implementations.

Meanwhile, the country’s external obligations have gulped about $1.69 billion, comprising principal repayments, interest charges and service fees, where applicable.

The repayments cut across four major areas of the external debt components, including multilateral deals, involving the World Bank Group, subsidiaries and the African Development Bank; bilateral deals- China Export-Import Bank; commercial, like the Eurobonds and Others- agency fees and oil warrant.

An analysis of the figures from the debt manager, showed that multilateral deals took $89,454 in the repayment of principal, interest charges, service fees, among others, while the bilateral obligations consumed $63,082 comprising the repayment of principal, interest charges, as well as commitment charges.

The largest part of the external debt cost in the third quarter was the repayment of the principal sum of $500,000 and the interest charge of $ 197,436, totaling $697,436.