Don't Miss


Home   >   Market - Finance   >   Finance   >   DMO concludes external debt profile, says states, FCT owe $2.384b

DMO concludes external debt profile, says states, FCT owe $2.384b

By on June 3, 2013

After five years of hard work, the Debt Management Office (DMO), at the weekend said it has ascertained that the Nigeria’s 36 states and the Federal Capital Territory (FCT), Abuja owe $2.384 billion in external debts as at December 31, 2012.

The amount, representing a rise $218.88 million or 10.11 per cent growth over the 2011 level, followed assistance given to help the states set up Debt Management Departments (DMD), which among others helped in the computation of the debt profile of the various sub-nationals.

According to its 2012 annual report and accounts, the DMO said the debt, mainly at concessionary rates represents 36.53 per cent of the nation’s total debt stock,were obtained by the Federal Government from multilateral agencies to fund projects and programmes like education, health, housing, sanitation and water supply and on-lent to the various states.

A breakdown showed that Lagos, Kaduna and Cross River States led the pack, accounting for $611.25 million or 25.64 per cent; $215.68 million, or 9.05 per cent; and $113.03 million, or 4.74 per cent.

Briefing newsmen in Enugu, DMO’s Director-General, Dr Abraham Nwankwo said at the end of March 2013, domestic debts stood at N6.49 trillion, while the external portion was $6.67 trillion. He noted that sourcing loans is not a bad idea as it is for development for the good of the citizenry, adding that even with the domestic debt of States, the nation’s debt-to-GDP ratio is still a healthy 20.77 per cent, far below the 40 per cent threshold set for emerging economies.

Even then he continued, going by available data, Nigerian states have the capacity to be fiscally sustainable, “that is why we are talking of transformation- building institutions, and keeping proper accounts. We would continue to ensure that no state borrows beyond its technical capacity and ensure they diversify their revenue base instead of relying solely on the (monthly) Federation Accounts Allocation Committee (FAAC) disbursements.”

Nwankwo explained that the figures ascribed to each of the state now as debts were accumulated over several years, adding that “no state has gone beyond the limit.

“We are now in a better position to say our public debt system is one of the best in the world, thanks to the various state governments for cooperating with the DMO, for being more transparent and subscribing to the exercise.

He spoke of plans by the government to issue inflation-backed bonds in the future as part of the total N577 billion to be raised from the domestic bond market to finance the 2013 budget.

Also, he said, the Federal Government is returning to the international bond market to raise $1 billion to be invested in national power infrastructure in line with the ongoing transformation in the nation’s power sector.

 

 

 

[Daily Independent]