Nigeria’s total debt rose marginally by 4.5 percent to N22.7 trillion or N74.28 billion in the first quarter of 2018, the country’s debt management office (DMO), said in a total debt profile it released Wednesday. The percentage increase was in comparison with the total debt profile recorded as at the end of December 2017.
The DMO said in a statement that the increase was accounted for largely by a growth in the domestic debts of states and the Federal Capital Territory (FCT), as well as the $2.5 billion Euro bond issued in February 2018 whose proceeds were still being deployed to redeem maturing Domestic Debt.
According to the DMO, the debt figures show that the implementation of the debt management strategy, which entails an increase in the external debt stock through new external borrowing and the substitution of high cost domestic debt with low cost external debt, is achieving the desired results in several areas.
One of the highlighted areas recording desired achievement, according to the DMO, is the share of the external debt stock in the total public debt which rose to 30 percent as at March 31, 2018, compared to 17 percent in 2015, 20 percent in 2016 and 27 percent in 2017.
Similarly, the DMO said the redemption of N279.67 billion of Nigerian treasury bills using some of the proceeds of the $2.5 billion Eurobond issued in February 2018, led to a decline in market interest rates from 13 – 14 percent per annum in December 2017 to 11 – 13 percent per annum in Q1 2018, further noting that the redemption of the treasury bills made more funds available to banks for lending to the private sector.
“The decline in interest rates implies lower cost of borrowing for the private sector. Thus, the Government is actively enabling the private sector through the instrumentality of financial markets, to play a leading role in economy,” the DMO said.