FG, States Debt Rises To N10.8trn

 As of today 13 November 2014, The federal and state governments have in the last one year borrowed no less than N2.52 trillion, the latest data released by the Debt Management Office (DMO) has shown, the leadership reports.

This value excludes the $1billion debt recently approved for the federal government for the purchase of arms to fight terrorism.

On a year-on-year basis, the nation’s total debt stock rose to $10.84 trillion as at September 30, 2014, compared to N8.32 trillion in September 2013. CONTINUE READING...

Data on external and domestic debt profile for the country, obtained from the agency’s website yesterday, indicate that external debt for federal and state government’s rose from N1.28 trillion in 2013 to N1.48 trillion in 2014.

However, the federal government’s domestic debt remained on the same level of N7.65 trillion, bringing the sub-total to N9.13 trillion in 2013, compared to N8.32 trillion a year earlier.

The domestic debt profile of the 36 states and the Federal Capital Territory (FCT), which was not captured in 2013, accounted for the difference of N1.7 trillion in 2014 which saw the total debt profile rising to N10.84 trillion.

According to the DMO, the actual domestic debt stock for 34 states and the FCT, and the estimated stock for Ekiti and Bayelsa states as at end December, 2013, were used to arrive at the September 2014 figure, an indication that actual figures at the end date are higher than the N1.7 trillion, since some states had accessed the capital market for bonds between January and September.

On a quarterly basis, the total debt has increased by over N800 billion in nine months, compared to N10.04 trillion recorded at the end of December 2013, and over N400 billion compared to the N10.43 trillion recorded as at June 30, 2014.

With the continuous fall in oil prices, which the Central Bank of Nigeria (CBN) official figures said stood at $83.12 per barrel as at end of October, $112.75 by end of December 2013, analysts have predicted that government would still borrow more in the last quarter of this year and first quarter of next year, more so as 2015 is an election year.

However, the federal government has maintained that the country’s debt profile is highly sustainable,
particularly in view of the rebased gross domestic product which led to Nigeria emerging as the largest economy in Africa and the 26th largest in the world.

The minister of finance and coordinating minister of the economy, Dr Ngozi Okonjo-Iweala, said that following the rebasing, the country’s debt-to-GDP ratio declined from 19 per cent to 11 per cent while the tax revenue-to-GDP ratio dropped from 20 per cent to 12 per cent.