Nigeria’s total public debt rose by N3.32 trillion in one year to N25.7 trillion as at the end of June 2019, the Debt Management Office (DMO), has revealed.
According to the debt management agency, while the federal government owed N20.42 trillion as of June 30, 2019 the 36 states and the Federal Capital Territory (FCT) had a total debt portfolio of N5.28 trillion.
The DMO report showed that the debt stock is made up of N8.32 trillion ($27.16 billion) external debt and N17.38 trillion borrowed domestically.
The country’s public debt, which stood at N22.38 trillion as of June 2018, increased to N24.39 trillion in December 2018.
Despite the huge debt, the federal government, the Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, had insisted that Nigeria was not in any way near a debt crisis.
“We don’t have a debt problem because at the ratio of three per cent of Gross Domestic Product (GDP), we have one of the lowest debts, in fact the lowest debt among our comparative countries.”
According to Zainab, “What we have is a revenue problem and we need to work to increase our revenue to ease our debt service obligations.”
She stressed the need for government agencies to enhance domestic revenue mobilisation so as to ease the debt service burden.
“We have a lot of headroom to borrow but we are not rushing to borrow more because we have to consider the foreign debt service that we carry,” she explained.
The minister promised that going forward, once a sum is released for capital projects, a schedule of the projects the funds is expected to cover would also be released.
“Subsequently, we are looking at the possibility that when we release capital projects, we would clearly determine what projects the funds are released for,” she said.
Zainab added: “We really are in a situation where we have to consider increasing building fiscal buffers because even though the global economy is going positively upward, there is still a lot of fragilities.
“A lot of countries, including our own, and the next wave of recession that might hit the global economy might not be the one that any country can quickly come out from unless the country has sufficient buffers.
“So as a country, both the federal and the states, we have to look at how to save more and we have to look at how to invest more in critical infrastructure that will yield revenue.
“There are only a few countries in the world that have saved so much in the world that any shock will not affect them. So we have to do this to protect ourselves from external shocks that we are now seeing coming from increase in rates in the US,” she added.