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FG serviced debt with N299.36bn in Q1 – Report

By BusinessNews Staff on September 24, 2014

The Federal Government spent N299.36bn to service the nation’s domestic and external debts in the first three months of this year, a document obtained from the Budget Office of the Federation has revealed.

The Budget Monitoring and Implementation Report for the first quarter of 2014 was jointly signed by the Minister of Finance, Dr. Ngozi Okonjo-Iweala; and Director-General, Budget Office of the Federation, Dr. Bright Okogu.

In the report, a copy of which was obtained by our correspondent on Monday in Abuja, the Federal Government said out of the N299.36bn, the sum of N279.64bn was released for domestic debt servicing, while external debt servicing gulped the balance of $119.48m (N19.72bn).

It stated, “As of March 31, 2014, a total of N279.64bn was released for domestic debt servicing, while the actual domestic debt payment was N214.67bn.

“The sum of N48.77bn (or 29.4 per cent) difference between the quarterly budgeted estimate of N165.9bn for domestic debt services and the actual domestic debt services was mainly due to additional issues of FGN bonds above the amount projected to be issued as a result of changes in the issuance calendar and the rising cost of rolling over Nigeria Treasury bills.

“The actual external debt service payment in the first quarter of the year amounted to $119.48m.”

A breakdown of the external debt service payments indicated that $51.04m (42.72 per cent) was to multilateral creditors; $22.79m (19.07 per cent) was to Non-Paris Club bilateral creditors; $45.63m (38.19 per cent) was to commercial and Eurobond creditors; and $0.01m (0.01 per cent) was paid to others.

The report put the country’s total public debt stock as of the end of the first quarter at $65.25bn (N10.16tn).

Giving a breakdown of the debt profile, the report stated that $9.17bn (N1.42tn), representing 14.05 per cent, was for external debt; while the balance of $56.09bn (N8.73tn), representing 85.95 per cent, was for domestic debt stock.

The implication of this, the report added, was that using the rebased Gross Domestic Product figure of 2013, the country’s total net value of debt to GDP ratio as of March 31 stood at 12.67 per cent.

This, according to the report, was significantly below the global threshold of 40 per cent.

A breakdown of the domestic debt stock shows that N4.13tn (57.52 per cent) is for FGN Bonds; N2.73tn (38.09 per cent) is for Nigeria Treasury bills; and N315.39bn (4.39 per cent) is for Treasury Bonds.

For the external debt component, the report gives the breakdown of the $9.17bn thus; multilateral debts, $6.57m (71.74 per cent); Non-Paris Club bilateral debts, $1.07bn (11.77 per cent); commercial and Eurobond, $1.51m (16.49 per cent).

[Punch]

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