The latest figures released by the Debt Management Office show that Nigeria’s total debt stock as at December 2019 stood at N27.4 trillion.
This includes N21.7 trillion owed by the Federal Government and N5.6 trillion owed by the state governments.
The Federal Government’s debts, therefore, made up 79.59 percent of the country’s total debt, while the states and the FCT government debt accounted for the remaining 20.41percent.
A breakdown of the data showed that foreign debts made up 32.93 percent of the total debt at N9.02 trillion, with the Federal Government owing N7.53 trillion and the state governments owing N1.48 trillion.
Domestic debts made up the remaining 67.07 percent. The Federal Government had a domestic debt portfolio of N14.2 trillion, accounting for 52.09 percent of total debt stock, while the states owed N4.1 trillion, 14.99 percent of the total debt stock.
What this means: These figures show a substantial increase in Nigeria’s public debt portfolio from N26.22 trillion in September 2019, to N27.4 trillion by the end of the next quarter.
According to the DMO, “The CBN official exchange rate of US$1 to N326 as at December 31, 2019, was used in converting the Domestic Debts to USD.”
This was in contrast to the previous report where the agency used an exchange rate of N307 to the dollar to convert the country’s domestic debts stock to US dollars as at September 2019.
As the country’s official exchange rate continues to climb due to the pressure on the naira, the debt figures as of March 2020 may turn out significantly higher than any of the previous quarters.
Experts believe that the situation does not have a silver lining in the near future, especially due to corona virus-induced crash in global oil prices.
Some of the analysts stated that the reduction of economic activities in countries like China, where Nigeria’s crude is bought, might have compromised the government’s ability to service foreign debts this year.
“The implications of these are that the government’s fiscal receipts are imperiled and foreign exchange inflow compromised. Our ability to service foreign debt is in jeopardy, meaning that the ability to borrow more is practically impossible,” they said.
A Chartered Economist and Accountant, Mr. Clement Ofuani, said that the situation puts the country’s fiscal health in peril.
“The ability of government to even pay salaries is questionable now, as the exchange rate of the naira has continued a downward slide against the dollar and will continue into the foreseeable future,” he said.