Within a three- month period, covering January to March this year, the federal government spent the sum of N610.2bn paying interest on its domestic debts. The amount is contained in a report on the nation’s debt which was obtained from the National Bureau of Statistics on Wednesday.
Nigeria’s domestic debt, according to the report, stood at N13.11tn as at the first quarter of this year. The domestic debt was incurred through the issuance of seven financial instruments.
They were federal government savings bonds where a total debt of N9.72tn had been raised, federal government savings bonds with N9.7bn, Sukuk bond with N200bn and Green bond with N10.69bn.
Other instruments used by the Federal Government in raising its domestic debt were Nigerian Treasury bills with N2.65tn, Nigerian Treasury bonds N150.98bn and Promissory notes with N366.85bn. Further analysis of the document showed that during the three months period, the Federal Government spent N120.91bn on interest payment on Nigerian Treasury bills.
A breakdown of the N120.91bn showed that the sum of N74.14bn was spent in January while February and March had N29.68bn and N17.09bn respectively.
For the Federal Government bonds, the report stated that N480.84bn was spent servicing this debt component during the three months period. A breakdown of the amount showed that N183.62bn was spent in January, N125.65bn in February while March had N171.57bn.
Similarly, the report explained that for the savings bond component, the sum of N347.91m was spent on interest on this debt instrument. The interest was paid in this manner, N100.5m in January, N92.51m in February while March had N154.89m.
Some finance and economic experts on Wednesday cautioned the Federal Government against further borrowing. They stated that the country’s debt profile is becoming unsustainable as it might be difficult to service it owing to revenue challenges facing the country.
They advised that rather than continue to rely on borrowing to finance its activities, the federal government should adopt other sources of funding the infrastructure needs of the country such as concessioning, privatisation, and Public Private Partnership arrangement.