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Nigeria’s domestic debt rises to N6.54trillion

By on February 1, 2013

The Federal Government borrowed a total of N914.69bn from domestic sources in the last one year, bringing its total domestic debts to N6.54tn, information made available by the Debt Management Office has shown.

Statistics posted on the DMO website on Wednesday showed that as of December 31, 2012, the Federal Government’s domestic indebtedness stood at N6.54tn, which was N914.69bn higher than the level as of December 31, 2011, when it stood at N5.62tn.

The latest statistics on domestic debts showed that the FGN Bonds accounted for N4.08tn or 62.41 per cent of government’s total domestic debts.

Nigeria Treasury Bills accounted for N2.12tn or 32.47 per cent of the total domestic debt, while Nigeria Treasury Bonds accounted for N334.56bn or 5.12 per cent of the debts.

On the other hand, the nation’s external debt grew by $860.49m within the same period. As of December 31, 2012, the external debt stock stood at $6.53bn as against $5.67bn recorded as of December 31, 2011.

Further analyses of the external debt profile showed that the Federal Government had the biggest chunk of the total external debts as it had borrowed $4.14bn as of December 31, 2012.

The 36 states of the federation, on the other hand, accounted for $2.38bn of the nation’s external debt profile. This means that the states’ share of the external debt stock was 36.53 per cent.

Among the states, Lagos, Kaduna, Cross Rivers and Ogun emerged tops in terms of their contributions to the external debt stock.

Borno, Delta, Plateau and Taraba are the least indebted states as far as external debt is concerned.

The Lagos State external debt stock as at December 31, 2012 stood at $611.25m, while Kaduna’s stood at $215.68m. Cross Rivers owed $113.03m and Ogun $102.06m.

On the other hand, Borno owed $14.15m; Delta, $18.99m; Plateau, $21.93m; and Taraba, $23.03m.

The National Assembly had recently approved external debt borrowings for some states that will change their debt profiles when the draw down begins.

Similarly, the Federal Government in the last six months, concluded arrangements for some external borrowings that will take the government’s external loans beyond $10bn when they are fully drawn down.

The Medium Term Expenditure Framework 2012 – 2014 showed that the Federal Government would also resort to the domestic debt market to raise N633.85bn this year.

The MTEF prepared by the Budget Office of the Federation stated that the Federal Government would run a deficit of N833.85bn in 2013 and 76.01 per cent of this would be funded through borrowing from the domestic debt market.

Other sources of fund for the deficit are N50bn to be obtained from oil signature bonuses and N150bn from the Stabilisation Fund/Excess Crude Account.

Given the size of the domestic debt, the government in the 2012 budget provided a total of N511.98bn for the servicing.

The amount proposed for servicing domestic debt is expected to increase to N543.38bn, reflecting the increase expected in the volume of domestic debt in 2013.