The nation’s foreign debt has risen by 40 per cent to $9.38bn, up from $6.7bn recorded last year, according to the latest data from the Debt Management Office.
The DMO said on Tuesday that local debt component of the total national debt was currently at N8.9tn ($48n), up by 37.1 per cent from N6.49tn at the end of March 2013.
Accordingly, the nation’s total public debt has also risen from N10.1tn as of March 2014 to N10.4tn as of June 2014.
The Director-General, DMO, Dr. Abraham Nwankwo, in a chat with journalists in Abuja on Tuesday, however, said the $9.3bn external debt profile represented an increase of $500m or 5.6 per cent over the $8.8bn figure recorded as of December 31, 2013.
According to him, when the foreign and local debt figure is combined, the country’s debt to Gross Domestic Product ratio is now 12.51 per cent.
He, however, said the country’s debt was still sustainable as the debt to GDP ratio was still below the global allowable threshold of 26 per cent.
Nwankwo said, “Our total domestic debt for the Federal Government, states and the FCT is about N8.9tn ($48bn) and the external debt is about $9.38bn.
“If you combine the two in one currency, you will find the debt to GDP ratio is about 12.51 per cent, which is much lower than the 26 per cent debt to GDP ratio that is allowed for countries in our peer group.”
He, however, said the low debt to GDP ratio was not an indication that the country would borrow excessively since the tax to GDP ratio was still very low at just six per cent.
The DMO boss gave an assurance that the borrowed funds had been well invested in the building critical infrastructure for the country, adding that the agency would continue to put in place structures that would ensure prudent management of the nation’s debt.
He said, “Part of the infrastructure upgrade in the country is being funded by money raised from either the domestic or international debt markets. For instance, the $1.5bn from our Eurobond is being invested in the power sector to boost activities there and boost power supply.
“The fund is also financing the Nigerian Bulk Electricity Bulk Trader and the Nigeria gas to power project. Also, part of the money borrowed was used for the dualisation of the Abuja International Airport Road in Abuja and the Zuba-Abuja Expressway; opening of new districts in the Federal Capital Territory and upgrade of the cotton industry in Nigeria.”
On the international debt market, Nwankwo said Nigeria’s issuance of a sovereign bond had equally paved the way for nine indigenous firms to issue bonds at the international debt market and raised $3.4bn.
He said the agency was focused on ensuring that the private sector took the lead in raising funds for development both locally and internationally to finance most of the projects.
