Saturday, March 5, 2016 10:53 am
According to most recent data revealed by Abraham Nwankwo, Director General of Nigeria’s Debt Management Office, the total external debt of the federation is $10.7 billion, with 31.4 per cent due to the states and 68.6 per cent due to the federal government.
On the domestic side, the total debt is about N10 trillion. Out of the sum, the federal government has the largest chunk of 84 percent, while the debts of state governments is the remaining 16 percent.
While the domestic debt of the federal government includes bonds and treasury bills issued, the domestic debt of the states is more comprehensive, including the bonds raised in the capital market, bank loans, monies owed contractors, pension arrears and sundry debts.
However, Nwankwo stated in an interview on Friday that despite the large sums being owed by the federal and state governments, the DMO is not opposed to even more borrowing. ‘’ A good number of times, it is very critical for you to do additional borrowing to be able to address the existing deficiencies that in the first instance led you to unsustainable debt profile,” the DMO DG said.
Nwankwo explained that what is most important is for the government to resource progress and development. ‘’ If you cannot access additional resources from revenue, it makes sense to go borrowing, provided you now direct the process of the borrowing in such a way that it helps to address the deficiencies and lead you to recovery. So that even the output you generate going forward, will be enough to address the existing debts as well as the new debts you have acquired,” he noted.
N1.2 trillion domestic borrowing and foreign loan of N635.8 billion was proposed in the Medium Term Expenditure framework for the 2016 fiscal year. And it was estimated more than five years ago that Nigeria needs a minimum of $25 billion per annum continuously for up to 10 years to close its infrastructure deficit.