The nation’s debt profile rose from N24.95 trillion to N25.7 trillion in the last three months. One year ago, it was N22.38 trillion.
The development showed that between April and June, the country’s obligations rose by N750 billion, and increased by N3.32 trillion when compared with the debt figures as of June 30, 2018.
Government has, so far, paid more than N800 billion in servicing the multiple obligations, which cut across domestic and foreign deals in the first half of 2019.
Total domestic debts stood at N17.38 trillion, with the Federal Government having more than three-quarters of the stockpile. These include FGN Bonds, N9.69 trillion; Nigerian Treasury bills, N2.65 trillion; Promissory Notes, N708 billion; FGN Sukuk, N200 billion; Nigerian Treasury Bonds, N126 billion; Green Bond, N26 billion; and FGN Savings Bond, N10.4 billion.
On the other hand, the external debt components are made up of multilateral deals worth $12.7 billion; bilateral, $3.3 billion; and commercial, $11.2 billion. Among these external debt obligations, the World Bank Group, China and Eurobond are top creditors, with over $23 billion claims on the country.
With the deficit plans in the ongoing 2019 budget, analysts warned that the country’s debt could hit N27 trillion by the end of the year. The debt sojourn has appeared endless amid a shallow diversification and economic challenges. Besides, the proposed 2020 budget has more than an N2 trillion deficit to be financed by further borrowing.
The situation has elicited reactions from some experts. An economist, Ayodele Akinwunmi, said the lack of commensurate investments with the level of borrowing could be traced to several sustainable subsidies that dominate the government’s spending.
“We have said it often that it is not good to borrow for consumption, but rather for investments that would ease bottlenecks in doing business, particularly infrastructure. There are a lot of subsidies from petroleum to electricity. We must change to benefit from these borrowings,” he said.
On his part, a development consultant, Jide Ojo, described the country’s rising debt profile, without commensurate infrastructural development, as heart-rending and disastrous. According to him, while sovereign indebtedness is not a bad idea, such funds should have been used on the productive sector of the economy, because it is not ideal to borrow to pay salaries and allowances.
He said that even in the proposed 2020 budget, Nigeria would be spending a humongous sum of N2.45 trillion on debt servicing alone.