National debt hits N8.32tn – DMO
Figures from the Debt Management Office (DMO) on Monday revealed that Nigeria's total debt currently stands at N8.32tn ($53.42bn)
The latest statistics showed that as of September 30, 2013, the total debt comprised the external debts of the Federal Government and the state governments as well as the domestic debt component of the Federal Government.
This means that the data did not include the domestic debt component of the 36 states of the federation and the Federal Capital Territory Administration.
A breakdown of the debts showed that the external debts of both the Federal and state governments stood at N1.28tn ($8.26bn) as of September 30.
Much of the debts, however, were incurred by the Federal Government from domestic sources as these contributed N7.03tn ($4.15bn) to the total debt stock.
A further breakdown of the domestic component of the total debt stock showed that the Federal Government Bonds contributed N4.22tn or 59.93 per cent of the domestic debt.
The Nigerian Treasury Bills accounted for N2.48tn or 35.31 per cent of the domestic debt component. Treasury Bonds, on the other hand, accounted for N334.56bn or 4.76 per cent of the domestic debt of the Federal Government.
The Nigerian Treasury Bills accounted for N2.48tn or 36.25 per cent of the domestic debt component.
On the other hand, Treasury Bills accounted for N334.56bn or 4.88 per cent of the total domestic debt owed by the Federal Government.
The Director-General of the DMO, Dr. Abraham Nwankwo, had recently said that compared to the level of foreign debt, the Federal Government had over-borrowed from domestic sources.
While unfolding the nation's Middle Term Debt Management Strategy, which was approved by the Executive Council of Nigeria, Nwankwo said there was an urgent need to rebalance the structure of the nation's debt because the interest rate payable on domestic debt was too high.
He said the ratio of the Federal Government's domestic debt stood at 88 per cent while that of the foreign debt stood at 12 per cent.
Nwankwo said the appropriate ratio should be 60 per cent for domestic debt and 40 per cent for foreign debt, adding that the newly approved Medium Term Debt Management Strategy would seek to achieve this ratio.
One of the ways of doing this is through the establishment of a sinking fund for retiring local debts that get matured. The second way is by borrowing more from foreign sources.
Nwankwo said, 'The main objective of the Medium Term Debts is to develop a strategy that would meet the financing needs of the government at a minimum cost, maintain risk at a prudent level and support the development of the market.'