The Federal Government’s debt has risen by 31 percent from $11.17bn to $14.67bn, according to an analysis of data on actual external debt stock from the Debt Management Office (DMO).
Specifically, the nation’s commercial loans rose by $3.5bn from $11.17bn in 2020 to $14.67bn in 2021.
According to the report, the $11.17bn recorded in 2020 was 33.49 percent of the total external debt stock. It consisted of $10.87bn Eurobonds and $300m Diaspora Bond.
Also, the $14.67bn recorded in 2021 as 38.21 percent of the total external debt stock. It consisted of $14.37bn Eurobonds and $300m Diaspora Bond
Nigeria’s commercial loans through Eurobonds rose from $1.50bn as of December 31, 2015 to $10.87bn in 2020, indicating a $9.37bn or 625 percent increase in five years.
In September last year, it was also reported that Nigeria raised $4bn through Eurobonds.
“Since the Eurobonds were issued as part of the new external borrowing in the 2021 Appropriation Act, the raising of $4bn through Eurobonds provides a significant amount of funds to finance projects in the Act, thus contributing to the implementation of the 2021 Appropriation Act,” the DMO had said in a statement.
In March this year, Nigeria acquired $1.25bn Eurobond debt from the International Capital Market, making Nigeria the first African country to access the ICM in 2022.
This happened a few days after the Minister of Finance, Budget, and National Planning, Mrs Zainab Ahmed, had told Reuters that there was no plan to enter the Eurobond market in 2022.
The DMO said the proceeds of the Eurobond would be used to finance critical capital projects in the budget to bridge the infrastructure deficit and strengthen Nigeria’s economic recovery. In contrast, the finance minister said that proceeds from the $4bn acquired from the Eurobond market the previous year would fund fuel subsidy.
Nigeria spent $3bn in four years on servicing commercial loans, including Eurobonds and Diaspora bonds, according to an analysis of data on actual external debt service payments from the DMO.
The cost of commercial loan servicing rose from $91.3m in 2016 to $840.1m in 2020, increasing $748.8m or 820.15 per cent.
