DMO: Securitisation And Exchange Rates-Drive Nigeria’s Debt-Surge To N121.67-Trillion (Full-Details)

DMO: Securitisation And Exchange Rates-Drive Nigeria’s Debt-Surge To N121.67-Trillion (Full-Details)

The Debt Management Office (DMO) has provided clarification on the factors contributing to Nigeria’s increased total debt stock, which rose by N24 trillion to N121.67 trillion by the end of March 2024. Director General Patience Oniha explained these developments in an interview with NAN on Tuesday in Abuja, addressing concerns raised by Nigerian stakeholders over the country’s escalating debt profile.

Oniha attributed the substantial increase in Nigeria’s debt stock to the securitisation of N4.90 trillion from the N7.3 trillion Ways and Means advances approved by the National Assembly. She also highlighted the impact of differences in foreign exchange rates, which significantly influenced the debt figures.

“The total public debt as of March 31 showed that the total public debt in naira terms stood at N121.67 trillion compared to N97.34 trillion as of December 31, 2023,” Oniha stated. She further elaborated on the complexities involved, including adjustments in interest rates and new borrowings outlined in the 2024 budget.

While acknowledging the concerns over the rising debt, Oniha underscored that the figures encompass both domestic and external debt of the federal government, as well as that of the 36 states and the Federal Capital Territory (FCT).

“It is important to recognize the impact of economic reforms, particularly changes in the dollar/naira exchange rate and interest rates, which have influenced the debt stock and debt service,” she emphasized.

Oniha concluded by addressing the perception of a sharp increase in debt, clarifying that variations in exchange rates accounted for the observed fluctuations, noting that in dollar terms, the debt stock decreased in the first quarter of 2024.

The DMO’s detailed explanation aims to provide transparency and context to Nigeria’s current fiscal situation amidst ongoing economic challenges.