As at the end of June 30, each Nigerian now owes about N165,500 to countries, international organisations and domestic investors as government borrowing increased to N35.5 trillion.
Data obtained from the Debt Management Office (DMO) published on Wednesday showed that Nigeria’s present debt stock increased in the last six months to 7.75 percent higher than the N32.9 trillion recorded at the close of last year
In terms of debt per capita which is calculated as the total public debt of a country divided by the country’s population, within the last six months, Nigeria’s debt increased by 0.60 percent from N164,500 in December.
The population figure used for the calculation is 200 million, as there is currently no official figure.
Giving a breakdown of Nigeria’s debt stock, the Director-General of DMO, Patience Oniha, revealed that external debt accounted for N13.7 trillion or 38.7 percent while approximately N21.8 trillion was sourced from the local market.
China accounted for about 10 percent of the external debt (which amounts to approximately N1.37 trillion), while the multilateral organisations had the largest share of 54.9 per cent.
Oniha also revealed that of the total value, 83.07 per cent was held by the Federal Government while the 36 states and the Federal Capital Territory (FCT) borrowings accounted for 16.93 per cent.
“The percentage of FG’s share of the national debt had increased from 81.94 per cent as at December 2020.
She however noted that the current debt stock remained within fiscally accepted bound but fears Nigeria’s low revenue can be a serious problem.
“The debt stock is within the acceptable limit; the challenge is not much is done to shore up poor revenue, if this is not done the country risks the debt sustainability issue”
“We should focus on revenue. The good thing about it is that the Minister of Finance, Budget and National Planning has started a programme aimed at growing the revenue profile. We must discipline ourselves to follow through to grow our revenue. If we continue to borrow and do nothing about growing our revenue base as other countries have done, we may have a debt sustainability challenge,” she said.
Oniha expressed concern that the country’s huge GDP has not translated to revenue, calling on authorities to aggressively pursue income-yielding policies.
“The country’s debt to GDP remained considerably low at 21.92 per cent, up from 21.61 per cent last year,
She, however, said it could increase to 35 per cent when the ways and means facility (WMF) that is, overdrafts with the Central Bank of Nigeria (CBN) is added to the debt stock.
On the current value of the WMF, the DG said she could only give information on the status at the beginning of the year, when it was estimated at N10 trillion, suggesting that the figure could be higher.
She admitted that the government had overreached the limit set by the CBN Act, stressing that the government is compelled to do so owing to the revenue shortfall.
“We are currently working at converting it to a tenor facility. This is because overdrafts should be cleared when they are due,” the DMO boss stated.