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The Debt Management Office (DMO), on Tuesday, disclosed that the Federal Government has so far borrowed N410 billion domestically to fund the 2018 budget.

This is as the country’s domestic and external debt (the Federal Government and 36 States and the FCT), as at June 30, stands at N22.38 trillion ($73.21 billion).

Director General of DMO, Patience Oniha, made the disclosures, in Abuja, at a briefing on the release of public data for June 2018.

According to her, there has not been any offshore borrowing to support the 2018 budget because necessary approvals from the appropriate quarters, including the National Assembly, are yet to be secured.

In the 2018 budget outlay, a provision of N1.643 trillion borrowing window was created. From that figure, the offshore borrowing space is N850 billion, while domestic borrowing is N793 billion.

On whether the country was not being boxed into a debt trap, the DMO boss said: “Our borrowing is not excessive. It goes through a rigorous process. If the government did not borrow so much in the last three years, it would not have been able to function. The huge borrowings sprang from the fall crude oil revenue and the attendant devaluation of the naira.

“Even at that, the DMO does annual debt sustainability analysis. A group of finance and economic experts do this. They project up to 20 years forward.

“They adjust some variables like if oil price falls, if production crashes and all that. They consider all the ‘what ifs’.

“The overall objective is to ensure that Nigeria’s debt is sustainable and this debt management strategy has already started yielding results. One of the beneficial outcomes is the rebalancing of the debt stock.

“The ratio of the domestic debt to external debt is inching towards the target of 60:40 and the target of 75:25 between long term domestic debt and short term domestic debt.

“The ratio between domestic and external debt stood at 70:30 compared to 72:28 in December 2017”, she explained.

Oniha said all the aforesaid have resulted in lower interest rates for the benchmark FGN securities from about 18.5% in January 2017 to 11-14% in the first half of 2018.

On the public debt stock, she said there was a marginal increase of 3.01 per cent over the public debt stock for December 2017.

She said the increase in the public debt stock over the six months period was due to the $2.5 billion eurobond issued in February 2018.

“When compared to the debt data for March 2018, the public debt stock actually decreased by 1.44% from N22.707 trillion in March 2018 to N22.38 trillion in June 2018.

“The decrease was due to a 3.38% decline in FGN’s domestic debt stock between March and June 2018. There were however marginal increases of 0.07% in the external debt stock and 2.75% in the domestic debt of states.

“With the redemption of about N840 billion of Nigerian Treasury Bills, more funds were available for lending by banks to the Private Sector. External capital raising activities also contributed to the increase in external reserves.

On states’ debt, the DMO boss said they’re are allowed to use 40% of their revenue for debt servicing and operating with the remaining 60%.

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