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Friday, 17 January 2020

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UPDATE- Nigeria’s debt now N26.2trn as Buhari govt moves to borrow N10.8trn

The Debt Management Office (DMO) says the total public debt as at September 2019 stood at N26.215 trillion...

The Director-General of DMO, Ms Patience Oniha, made this known during a presentation of Public Debt Data as at September 30, 2019 in Abuja on Friday.

Oniha explained that the debt comprised the Federal Government, the 36 states and the Federal Capital Territory’s debts within the period.

She said that the comparative figure for June 2019 was N25.701 trillion which implied that in the quarter July to September 2019, the total public debt grew by 2.0 per cent.

Oniha explained that the total public debt as at September 2019 included promissory notes in the tune of N821.651 billion, which she said, were issued to settle the Federal Government’s arrears to oil marketing companies and state governments.

The Director General said that the 2019 Appropriation Act provided for a total new borrowing of N1.605 trillion split equally between domestic and external, adding that only the domestic component of N802.82 billion was raised due to the late passage of 2019 budget.

“Among the highlight of the DMO’s achievements for 2019 was the issuance of a 30-year bond for the first time.

“The introduction of 30-year bond was to meet the investment needs of long-term investors such as insurance companies and support the development of domestic financial markets in areas such as mortgages” she said.

According to her, from the Federal Government’s perspective, the 30-year bond also contributed to reducing the refinancing risks of the public debt stock.

Oniha stated that the borrowing was to finance specific projects and activities of the government as well as to finance deficit budget.

She further explained that due process, which involved the executive and legislature, was followed.
The DMO, however, expressed regret that the discussion around the debt was politically motivated.

In December, Chairman, Senate Committee on Finance, Sen Olamilekan Adeola, stated that the plan by the Buhari government to borrow about 30 billion dollars was to boost development.

“The 30 billion dollar loan the Federal Government is sourcing for is not one of those frivolous loans; this is a loan that is tied to projects”, he said.

”This loan is needed to fund landmark and ambitious projects such as the Lagos-Ibadan Expressway, the East West Road, the Second Niger Bridge, among others.

”We need a large chunk of money to get all these projects completed. So, it is only if government access this loan that we can give all these great projects the right direction.

”Again, the government needs this loan to execute those projects that would impact and transform the economy and put the country on the path of progress. So, the loan is necessary”.

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