The Debt Management Office says the rise in Nigeria’s public debt stock from N97.34 trillion in December 2023 to N121.67 trillion in March is partly due to exchange rate fluctuations. DMO director-general Patience Oniha said this in an interview on Tuesday in Abuja. She clarified misconceptions about the recently released update of the country’s total debt profile. She said the securitisation of N4.90 trillion as part of the securitisation of the N7.3 trillion Ways and Means Advances approved by the National Assembly was also responsible for the N24.33 trillion increase in the debt stock. According to her, there is also the interest rate and new borrowing of N2.81 trillion as part of the N6.06 trillion provided in the 2024 budget.
She, however, emphasised that the debt stock included the domestic and external debt stock of the thirty-six states and Abuja. “The total public debt as of March 31 showed that the total public debt in Naira terms stood at N121.67 trillion compared to N97.34 trillion as of December 31, 2023. While detailed information was provided on the data, such as the split between external and domestic debt as well as the fact that the debt stock includes the domestic and external debt stock of the 36 states and the FCT, it has become imperative to provide some explanations. 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 the increase in Naira in terms of N24.33 trillion between the fourth quarter of 2022 and the first quarter of 202 did not strictly represent new borrowing.
She explained that the total external debt stock was relatively flat at 42.50 billion dollars and 42.12 billion dollars 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 dollars,” Ms Oniha stated. She urged President Bola Tinubu’s 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)
