Debt Management Office (DMO) Wednesday confirmed that Nigeria’s total public debts stood at N21.725 billion at the end of 2017.
Director-General of DMO, Ms Patience Oniha who disclosed this at a media briefing in Abuja said of the amount, federal government’s domestic debt was N12.589 trillion, while that of states and the Federal Capital Territory amounted to N3.348 trillion.
On the other hand, the total external debt both the federal government and states was an equivalent of N5.787 trillion.
She however, stated that the new Debt Management Strategy has brought about restructuring the portfolio in such a way that has resulted in reduction of debt servicing costs, lowering interests rates in the domestic market and an improved availability of credit facilities to the private sector.
In the light of this, the $3 billion Eurobond recently floated has resulted in an annual savings of about 81. 66 in debt servicing, as it was secured at about 7 per cent interest, compared to about 15 or 16 per cent interest on domestic borrowings.
“DMO repaid N198 billion Nigerian Treasury Bills in December 2017 with the proceeds of Eurobond issuances and that it has continued further implementation of the strategy in 2018, with the issuance of the USD2.5 billion Eurobonds in February 2018, the proceeds of which is being used to repay maturing domestic debt, starting with N130 billion NTBs repaid on March 1, 2018.”
The new debt management strategy she said would reduce the ratio of domestic debt in the portfolio, while the ratio of external debt is increased – with a target of 60% domestic and 40 percent external.
As at the end of 2017, that external debt was 26.64 percent of total portfolio, up from 20.04 percent in 2016, while domestic debt was 73.36, which is a reduction from 79.96 percent in 2016.
Oniha promised that debt service rate would reduce henceforth with efforts of government to increase revenue through ttaxes
She also said “rice is a good story and we can replicate the rice story in other sectors. As we reduce imports and increase exportation of goods, we will readily build our external reserves.”
The DMO boss allayed fears raised by former US Secretary of State Mr. Rex Tillerson in the need to be wary of Chinese loans.
She said that Nigeria’s borrowing was from various countries including, China, Japan, France, India, as well as, Germany and based on Nigeria’s needs, interests and conditions considered favourable to the nation.
According to her, Chinese loans were being used for specific infrastructure projects such as railways and airports re-modelling.
“In all of these, we look at Nigeria’s interests and we ensure that the offers are favourable. If the Americans have any offer, it should be put on the table. It is not about de-marketing China.
“If we receive an offer from America that is good, we will look at it. The issue of China loans have been on the table for a long time. When you take a foreign loan, it often has a foreign component in terms of procurement and all that.”
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