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Nigeria’s debts rise to N19 trillion
The Federal government’s debt profile shows that domestic debts have increased from N8.5 trillion as at March 2015 to the current value of N11.9 trillion.
President Muhammadu Buhari
The information as disclosed on Monday, June 5, 2017, by the DMO revealed that the country’s debt profile increased by N1.8 trillion from N17.36 trillion in December 2016.
According to the data released, President Muhammadu Buhari’s administration has added around N7.1 trillion in two years to the total debt of the country, which was N12.06 trillion as at May 2015.
The Federal government’s debt profile also shows that domestic debts have increased from N8.5 trillion as at March 2015 to the current value of N11.9 trillion.
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Similarly, the foreign debt component showed a rise from $9.46bn to $13.81bn within the same period. The DMO noted that using an exchange rate of N306, the naira equivalent of Nigeria’s indebtedness is N4.23 trillion.
There are also concerns that the debt-to-GDP ratio of the country is on the increase. As at December 2016, Nigeria’s debt-to-GDP ratio stood at 18.6% compared to 12.1 % in 2015.
The debt-to-GDP ratio is a rate used as financial leverage by sovereign nations in order to get loan/credits from international creditors and multinational financial institutions. This rate is expected to be below 60%, but for developing countries like Nigeria, creditors prefer a lower rate.
Information gathered also shows that debts owed by states governments have increased by 75.15% between December 2015 and March 2017; the total state government debt was estimated at N1.69 trillion in 2015 and currently stands at N2.96 trillion.
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