{"id":483,"date":"2014-08-20T09:17:00","date_gmt":"2014-08-20T09:17:00","guid":{"rendered":"http:\/\/newsroom247.com.ng\/?p=483"},"modified":"2014-08-20T09:17:00","modified_gmt":"2014-08-20T09:17:00","slug":"nigeria-sinks-deeper-into-external-debt","status":"publish","type":"post","link":"http:\/\/newsroom247.com.ng\/?p=483","title":{"rendered":"Nigeria sinks deeper into external debt"},"content":{"rendered":"
\n

\"naira-Dollar\"<\/a><\/p>\n

N<\/b><\/i><\/sub>igeria\u2019s <\/b><\/i>total<\/i> debt stock has again risen to a very high level of N10.4 trillion as at June 2014. The rising debt profile of the country is made up of external debt stock of N1.46 trillion ($9.377 billion), Federal Government domestic debt of N7.421 trillion ($47.653billion).<\/i><\/p>\n

States in the federation have a domestic debt stock of N1.551 trillion or $9.963 billion. The Federal Government\u2019s share of the rising external debt stands at $6.363 billion.<\/p>\n

As at December 2013, however, the total stock of external debt was $8.821 billion indicating a rise of $556 million in the first half of 2014. But as at December 31, 2012 Federal Government\u2019s external debt was $4.14 billion as against a total debt stock of both Federal and state governments of $6.5 billion.<\/p>\n

A break-down of the rising debt profile showed that Federal Government\u2019s external and domestic debts amounted to N8.8 trillion or $57.030 billion as at the end of June 2014. Federal Government borrowing from multilateral Institutions amounted to $3.826 billion while loans from bilateral sources mainly China Exim Bank and Eurobond amounted to $2.537 billion.<\/p>\n

In the case of states, a total of $2.904 billion was sourced from multilateral institutions, $108.9 million was obtained as loans from bilateral sources, thus making the states\u2019 total outstanding external debt as at June 2013 $3.013 billion.<\/p>\n

Disclosing these facts in Abuja, Director General, Debt Management Office, Dr. Abraham Nwankwo said that although the debt profile had increased, he assured that the debt remained sustainable at a ratio of 12.51 to the Gross Domestic Product, GDP.<\/p>\n

The D-G also said that the managers of the nation\u2019s debt would apply more caution in further borrowings in order not to run into the crisis of debt overhang, which the nation once suffered.<\/p>\n

His words: \u201cThe sovereign debt is doing well. Currently our total sovereign domestic debt for both Federal and states and the FCT is about N8.9 trillion and external debt is about $9.38 billion.<\/p>\n

\u201cOur current debt\/GDP ratio is about 12.51 per cent which is much lower than the 56 per cent total public to GDP for countries of Nigeria\u2019s group.<\/p>\n

However, this is not an indication that Nigeria can afford to borrow without caution. In spite of the re-basing which means we have more capacity to borrow, we are not going to borrow without caution. In fact, we are going to be more cautious, especially because our tax-GDP ratio is low. Many economic agents do not pay their taxes.\u201d<\/p>\n

Eurobond <\/b><\/p>\n

Dr. Nwankwo said that the Eurobond initiative which commenced in 2011 with the floating of the $500 million Eurobond has positively changed the profiles of Nigerian corporate organisations and their ability to raise long-term funds from the international capital market.<\/p>\n

The Federal Government raised additional $1 billion from the international capital market in 2013 following which several Nigerian firms, especially banks have also gone to the international capital market to raise funds for their operations.<\/p>\n

According to him, six companies issued nine bonds within the last one year, from which about $3.4 billion was raised. The DMO boss said his team would ensure that the funds raised from the capital markets both at home and outside were utilised profitably in the interest of the nation\u2019s economy.<\/p>\n

The D-G disclosed that the funds raised from the Eurobond had been deployed to very critical sectors of the economy, requiring urgent financing to boost the economy, especially, the electricity power, agriculture, solid minerals and the dualisation of the Airport and Kubwa Roads in Abuja.<\/p>\n

Dr. Nwankwo said that his team has managed the nation\u2019s debt in line with the national priority needs.<\/p>\n

with a view to creating full values funds borrowed in order to ensure maximum benefits to the economy.<\/p>\n

His words, \u201cwe have tailored the nation\u2019s debt management in accordance with our peculiarities. We have used debt management to leverage development of the private sector and it has helped them to raise money to boost the real sector such as manufacturing, solid minerals, agriculture and electricity power supply.<\/p>\n

\u201cWe have to develop the capital market to develop long-term debt instrument such that rather than what the banks have been used to in terms of given out 91 day loans, we now have debt instruments of up to 20 years. We have made it possible for the companies to float their own bonds in the domestic market such that between 2005 and 2013, 23 companies raised N223 billion which was evidence that that aspect of the transformation agenda of the President Goodluck Jonathan is working.<\/p>\n

\u201cThe implication is that with operators in the real sector of the economy being able to raise long-term funds, they can expand their businesses, increase productivity and create more jobs, across the country, on a sustainable basis\u201d.<\/p>\n

Dr. Nwankwo said that great opportunities had opened to the Nigerian public and appealed to those creating violence and instability to have a re-think.<\/p>\n

In his words, \u201cwe could have done better if the artificial distractions had been avoided. If we are lagging behind, we are the ones holding ourselves backward.\u201d<\/p>\n

Public should monitor funds\u2019 utilisation<\/p>\n

He explained that Nigerians should not policies nor resist state governors who want to access funds from the capital market in order to undertake development projects.<\/p>\n

According to him the general public, especially civil society groups and the media, should rather insist on the building of institutional frameworks to guarantee the effective and efficient utilization of borrowed funds.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Nigeria\u2019s total debt stock has again risen to a very high level of N10.4 trillion as at June 2014. The rising debt profile of the country is made up of external debt stock of N1.46 trillion ($9.377 billion), Federal Government domestic debt of N7.421 trillion ($47.653billion). States in the federation have a domestic debt stock […]<\/p>\n","protected":false},"author":2,"featured_media":484,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"ngg_post_thumbnail":0,"spay_email":"","footnotes":"","jetpack_publicize_message":"","jetpack_is_tweetstorm":false},"categories":[1],"tags":[],"class_list":["post-483","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"jetpack_featured_media_url":"http:\/\/newsroom247.com.ng\/wp-content\/uploads\/2014\/08\/naira-Dollar.jpg","jetpack_publicize_connections":[],"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p4oswh-7N","_links":{"self":[{"href":"http:\/\/newsroom247.com.ng\/index.php?rest_route=\/wp\/v2\/posts\/483","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/newsroom247.com.ng\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/newsroom247.com.ng\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/newsroom247.com.ng\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"http:\/\/newsroom247.com.ng\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=483"}],"version-history":[{"count":1,"href":"http:\/\/newsroom247.com.ng\/index.php?rest_route=\/wp\/v2\/posts\/483\/revisions"}],"predecessor-version":[{"id":485,"href":"http:\/\/newsroom247.com.ng\/index.php?rest_route=\/wp\/v2\/posts\/483\/revisions\/485"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/newsroom247.com.ng\/index.php?rest_route=\/wp\/v2\/media\/484"}],"wp:attachment":[{"href":"http:\/\/newsroom247.com.ng\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=483"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/newsroom247.com.ng\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=483"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/newsroom247.com.ng\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=483"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}