How Buhari borrowed N24.387trn in 3 years – Debt Management Office

Nigeria’s total debt (external and domestic) stood at N24.387 trillion ($79.437 billion) as at December 31, 2018, Director- General, Debt Management Office (DMO), Ms. Patience Oniha, has confirmed.

The figure is higher to December 2017 total debt stock figure of N21.725.77 trillion.

This comes as the agency unfolded its agenda in 2019, with a priority to undertake more of projecttied borrowing and access more external borrowing from concessional sources. The borrowing, which is subject to National Assembly’s approval, has an equal amount split between domestic and external source.

The sum of N824 billion domestic debt will be sourced via FGN bonds, Sukuk, green bond, savings bond, and external N824 billion. A longer tenor bond of 30 years maturity will be issued in 2019, given the relatively low interest rates compared with 2017 levels of over 18%. Briefing the media on debt status updates, Oniha said the latest debt stock figure represents year-on-year growth of 12.25%.

The DMO boss said the agency will, in the course of the year, issue 30-year Federal Government of Nigeria Bonds (FGN Bonds) for the first time. “The issuance of the Bond will meet the needs of annuity funds and other long-term investors while also developing the domestic capital market and reducing the re-financing risk of the FGN.

Another area of focus will be the management of risks associated with the debt stock to mitigate debt service costs,” she added. Oniha said more progress was made towards achieving the target debt stock mix of 60% (domestic) and 40% (external). She said the share of domestic debt dropped to 68.18% from 73.36% as at December 31, 2017, thereby achieving a mix of 68.18% and 31.82% in the debt stock. She noted that DMO strategy of using relatively cheaper and longer tenored external funds is achieving the expected objectives.

“Some of the objectives were, to create more space for other borrowers in the domestic market, extend the average tenor of the debt stock in order to reduce refinancing risk and increase external reserves. “The implementation of the strategy led to an injection of N855 billion through the redemption of Nigerian Treasury Bills in 2018 and a general drop in the FGN’s borrowing rate in the domestic market from over 18% per annum in 2017 to 14 – 15% per annum in 2018.”

The DMO stated that the FGN’s domestic debt stock includes N331.12 billion promissory notes issued to oil marketing companies and state governments in December 2018. She explained that borrowing for 2019 will be 50-50 split between domestic and external borrowing, a strategy, she said, was consistent with the Debt Management Strategy 2013-2019 aimed at achieving 60:40 ratio between domestic debt and external debt.


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