The Debt Management Office (DMO) has attributed the significant rise in Nigeria’s public debt stock from N97.34 trillion in December 2023 to N121.67 trillion in March 2024 to several factors, including exchange rate fluctuations.
This was stated by the Director-General of the DMO, Patience Oniha, during an interview with the News Agency of Nigeria (NAN) on Tuesday in Abuja.
Oniha clarified misconceptions surrounding the updated total debt profile of the country, explaining that one of the main contributors to the N24.33 trillion increase was the securitisation of N4.90 trillion out of the N7.3 trillion Ways and Means Advances approved by the National Assembly.
She noted that this securitisation, along with exchange rate changes, played a significant role in the surge.
Additionally, Oniha mentioned other contributing factors such as the interest rate environment and new borrowing, which amounted to N2.81 trillion as part of the N6.06 trillion provisioned in the 2024 budget.
She stressed that the debt stock encompasses both domestic and external debts of Nigeria’s 36 states and the Federal Capital Territory (FCT).
“The total public debt as at March 31 showed that the total public debt in Naira terms stood at N121.67 trillion compared to N97.34 trillion as at December 31, 2023,” Oniha stated.
Oniha further elaborated that the detailed information provided included a breakdown between external and domestic debt, highlighting the inclusion of the domestic and external debt stock of the 36 states and the FCT.
“It is important to recognise the fact that Nigeria has undergone some major reforms which have impacted economic indices such as the dollar/Naira exchange rate and interest rates.
“These two, in particular, affect the debt stock and debt service,” she said.
Ms Oniha said that the increase in Naira Terms of N24.33 trillion between the fourth quarter of 2023 and the first quarter of 2024 did not strictly represent new borrowing.
She said that the total external debt stock was relatively flat at $42.50 billion and $42.12 billion in the fourth quarter of 2023 and the first quarter of 2024 respectively.
“The Naira values were significantly different at N38.22 trillion and N56.02 trillion respectively, representing a difference of N17.8 trillion.
“This explains the perceived sharp increase of N24.33 trillion in the total debt stock in the first quarter of 2024.
“The difference in the exchange rate for the two periods also explains why in dollar terms, the total debt stock actually declined in the first quarter of 2024 to $91.46 billion,” Ms Oniha said.
She said that the debt report was somewhat an improvement from the past, before President Bola Tinubu’s government.
According to her, if you discount FX impact, the debt is moderate and within normal limits.
She urged the Federal Government to prioritise fiscal retrenchment while assuring that the various measures to attract foreign exchange inflows would increase external reserves and support the Naira exchange rate.
(NAN)
ALSO READ THESE TOP STORIES FROM NIGERIAN TRIBUNE
