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BUSINESS & ECONOMY

At the End Of First Quarter, FG’s Domestic Debt Stood At N610 Billion

The quarterly data released by the Debt Management Office (DMO) has showed that the Federal Government of Nigeria’s (FGN’s) domestic debt as at the ending of March 2015 stood at N8.51trillion ($42.8 billion), an equivalent of 9.4 per cent 2014 gross domestic product (GDP).

The increase in naira terms in the first quarter was N610 billion, of which FGN bonds accounted for N580 billion.

The DMO data also  showed that Nigeria’s total debt stock, addition of external and domestic debt as at March 2015 stood at N12.06 trillion, representing an increase of 11.95 per cent from the December 31, 2014 figure of N11.24 trillion.

A further breakdown of the debt stock showed that external debt accounted for 15.46 per cent of the total debt stock at N1.86 trillion, while domestic debt stock accounted for 84.54 per cent of the total debt stock at N10.20 trillion ($1/N188.70 billion). The debt-to-GDP for 2014 stood at 12.47 per cent.

Analysts at FSDH Research estimate a debt-to-GDP ratio of 12.89 per cent to end year 2015, meaning that Nigeria’s debt portfolio still has wide fiscal sustainability space; “as the debt-to-GDP ratio is below the applicable critical limit of 40 per cent set for the economy by the government.”

On their own part, analysts at FBN Capital posited  that the ratio for federal domestic debt was transformed by the rebasing of the national accounts published by the National Bureau of Statistics (NBS) in April 2014.They  however maintained that FGN’s domestic debt stock is still manageable.

“These are the sovereign obligations of the FGN, and therefore exclude the obligations of AMCON (now solely held by the CBN), the NNPC and other public agencies, and the state governments. We estimate the latter at N2.85trn (bonds and loans combined) and the burden for the widest measure of public debt at 25 per cent of 2014 GDP,” the analysts said.

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