…FG to borrow N823b through treasury bills in Q1’19***
Nigeria’s total debt now stands at N22.43tn, data obtained from the Debt Management Office have shown.
According to the DMO, the nation’s total debt as of September 30, 2018, stood at N22.43tn.
As of June 30, 2015, the country’s total debt stood at N12.12tn. This means that within the tenure of the present administration which came to power on May 29, 2015, the country’s total debt has risen by N10.31tn or 85.06 per cent.
Of the total debt, the external component of both the Federal Government and state governments’ debts including that of the Federal Capital Territory stood at $21.59bn.
As of June 30, 2015, the external debt component of the country’s total debt stood at $10.32bn. This means that the external debt component rose by $11.27bn or 109.21 per cent.
On the other hand, the domestic debt of both the Federal Government and the subnational governments stood at N15.81tn.
Analysing the debt statistics further showed that the domestic debt of the Federal Government alone stood at N12.29tn as of September 30, 2018.
The domestic debt of the Federal Government as of June 30, 2015, stood at N8.4bn while that of the states and FCT stood at N1.69tn.
The DMO added that the debt statistics as of September 30, 2018, was only slightly different from the statistics as of June 30, 2018.
On the difference between the debt statistics of the two quarters, the DMO said, “External debt declined by 2.02 per cent to $21.59bn due largely to the redemption by Nigeria of a $500m Eurobond which matured on July 12, 2018.
“The Eurobond which was issued for a tenor of five years in 2013 was the first Eurobond maturity for Nigeria and Nigeria’s ability to repay it seamlessly boosted Nigeria’s position as a good credit in the International Capital Market.
“The domestic debt of the FGN, states and the FCT grew by 1.19 per cent from N15.63tn in June 2018 to N15.8tn in September 2018. This increase of N185bn was attributed to the FGN (N135bn) and states and FCT (N50bn).”
It added, “The combination of an increase in the level of domestic debt and a decrease in the external debt stock resulted in a slight shift in the portfolio composition.
“As of September 30, 2018, the share of domestic debt was 70.51 per cent compared to 69.83 per cent in June 2018.
“This trend is expected to be reversed in Quarter Four 2018 as the new external borrowing of N849bn (about $2.78bn) provided in the 2018 Appropriation Act is expected to be raised within the quarter.”
The current strategy of the Federal Government is to raise external debt component to 40 per cent and to raise the local debt component to 60 per cent in order to take advantage of the lower interest rate on foreign debts.
In the meantime, the federal government will borrow N823
billion from the domestic economy in the first quarter of the year (Q1’19)
through treasury bills to be issued by the Central Bank of Nigeria (CBN).
The CBN disclosed this in its treasury bills (TB) issuance programme for Q1’19 released yesterday.
The fresh TBs to be issued during the quarter comprise N51.5 billion worth of 91-Days TBs, N164.9 billion worth of 182-Days TBs and N607.1 billion worth of 364-Days TBs.
Vanguard analysis showed that from January 3rd to
January 31st the CBN will issue N555.02 billion worth of TBs comprising
N23.8 billion worth of 91-Days bills, N116.16 billion worth of 182-Days bills
and N415.06 billion worth of 364-Days bills.
In February, the apex bank will issue N268.7 billion worth of TBs comprising N27.8 billion worth of 91-Days bills, N48.8 billion worth of 182-Days bills and N192.1 billion worth of 364-Days bills.
But the amount of fresh TBs to be issued is N84.87 billion less than the N907.87 billion worth of TBs that will mature and be repaid during the period, reflecting the FG’s decision to reduce domestic borrowing in favour of foreign borrowing.
The maturing TBs comprise N59 billion worth of 91-Days TBs, N248.8 billion worth of 182-Days TBs and N678.1 billion worth of 364-Days TBs.
The Citizen with additional report from Vanguard