As in-coming administration of the President-elect, General Muhammadu Buhari gets set to for its inauguration on May 29, there are indications that it would inherit a huge debt. This is because Nigeria’s sovereign and sub-national debt is now N12.06 trillion. This is made up of debts owed by the federal and state governments as well as the Federal Capital Territory (FCT). According to the Debt Management Office, the country’s public debt grew by N1.9 trillion in 12 months, from N10.16 trillion as of March 31, 2014 to N12.0 6trillionn as of March 31, 2015.
The rise in the debt stock could be attributed the fall of the Naira against the United States’ Dollar. In Dollar terms, the country’s public debt actually reduced from $65.25 billion to $63.51billion in the one year period. The exchange rate of the Naira to the Dollar was N155.74 on March 31, 2014, while by March 31, 2015, it had fallen to N197.
The debt structure consists of N8.5trillion domestic debt and N3.56 trillion foreign debt. The external debts of both the federal and state governments rose marginally from $9.17 billion on March 31, 2014 to $9.46 billion as of March 31, 2015.
A further analysis of the debt structure indicates that FGN Bonds accounted for N5.37tn or 63.13 per cent of the total while the Nigerian Treasury Bills accounted for N2.87tn or 33.68 per cent of the Federal Government’s total domestic debt profile.
Similarly, Nigerian Treasury Bonds accounted for N271.22m or 3.19 per cent of the Federal Government’s total domestic debt profile.
By Dike Onwuamaeze
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