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Monday, 11 July 2016

Debt servicing gulps N5trn in five years – DMO

Debt servicing gulps N5trn in five years – DMO

Nigeria has in the past five years paid $25.220 billion (an estimated N5 trillion based on the old fixed exchange rate) in repayment of loans and service charges within the period of 2011 to 2015.
The 2015 Annual Report of the Debt Management Office (DMO) just released yesterday indicated that this year alone, even in the face of cash crunch when the Federal Ministry of Finance is yet to make any quarterly release in implementing the 2016 budget, N446 billion has already being paid out to creditors in debt servicing
Nigeria’s current public debt, according to the report stands at N8.837 trillion for the domestic component and $10.718 billion for the foreign stock.
A breakdown of debt servicing in the last five years indicated that the sum of $3.781 billion was used to service debt in 2011, $4.918 billion for 2012 and $5,520 billion in 2013. For the 2014 and last year, the sum of $5.500 billion and $5.499 billion respectively were paid out.
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Dwelling on the domestic debt servicing pay out in 2014 and last year, Director General of DMO, Dr. Abraham Nwankwo reported that the Federal Government spent a total of N1.88 trillion.
Furthermore, the debt service payment showed that Nigeria spent N25billion on repayment of principal and N993.13 billion on interest repayment in 2015.
The report said, “The FGN’s domestic debt service as at the end of December, 2015, amounted to N1, 018.13 billion compared to N865.81 billion in the corresponding period of 2014, representing an increase of N152.32 billion or 17.59 per cent.
“This amount comprised principal repayment of N25 billion and interest payment of N993.13 billion. By instrument-type, FGN bonds debt service accounted for 62.41 per cent of the total debt service payment, while payments in respect of the Nigerian Treasury Bills and Treasury Bonds were 31.83 and 5.76 per cent, respectively.
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