The latest report from the Debt Management Office (DMO) showed that the federal government’s domestic debt at N8.84 trillion ($44.9 billion) at end-December 2015, equivalent to 8.9 per cent of estimated 2015 GDP.
When we add the federal government’s external debt (at $10.72 billion equivalent to 2.1 per cent of estimated 2015 GDP), we arrive at a burden representing 11.0 per cent of GDP, the DMO noted in the report.
This is, however, excluding bank borrowings of the states, the obligations of the Nigerian National Petroleum Corporation (NNPC), the Asset Management Corporation of Nigeria (AMCON), other public agencies, the arrears due to contractors and contingent liabilities such as guarantees.
Under an implausible worst case scenario, assuming for example that AMCON makes no further recoveries, experts said the burden could rise to 25 per cent of GDP.
“An estimate of total public debt would have to include the naira bonds and residual bank borrowings of the states, the obligations of the NNPC, AMCON and other public agencies, the arrears due to contractors and contingent liabilities such as guarantees,” said analysts at FBN Capital.
These metrics, they added, underpin Nigeria’s sovereign credit ratings (BB- from Fitch and the equivalent from Moody’s), and B+ from S&P.
