By The New Diplomat Business Desk
The Debt Management Office(DMO) has pleaded with Nigerians to remain calm not withstanding the astronomic rise in the country’s public debt stock from N97.34 trillion in December 2023 to N121.67 trillion in March.
The Director-General of DMO, Patience Oniha, who spoke with the press on Tuesday said the rise in the public debt of Nigeria was partly due to exchange rate fluctuations.
The New Diplomat reported recently that data published by the DMO revealed that the country’s total public debt has increased significantly to N121.67 trillion in the first three months of 2024.
Indeed, in a press statement issued by DMO, it was disclosed that the public debt of Nigeria soared by N24.33 trillion as of March 31, 2024, from the total public debt of N97.34 trillion as of December 31, 2023.
The breakdown of the total public debt comprises domestic and external debts of the Federal Government, the thirty-six state governments, and the Federal Capital Territory (FCT).
However, speaking on the data, Oniha clarified that the debt report was somewhat of an improvement from the past, before the administration of President Bola Ahmed Tinubu.
According to her, if the FX impact is discounted, the debt is moderate and within normal limits.
She also explained that the securitisation of N4.90 trillion as part of the securitisation of the N7.3 trillion Ways and Means Advances approved by the National Assembly was also responsible for the N24.33 trillion increase in the debt stock.
According to her, there is also the interest rate and new borrowing of N2.81 trillion as part of the N6.06 trillion provided in the 2024 budget.
She, however, emphasised that the debt stock included the domestic and external debt stock of the thirty-six states and the Federal Capital Territory (FCT).
She said: “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.
“While detailed information was provided on the data such as the split between external and domestic debt as well as the fact that the debt stock includes the domestic and external debt stock of the 36 states and the FCT, it has become imperative to provide some explanations.
“It is important to recognise the fact that Nigeria has undergone some major reforms which have impacted economic indices such as the dollar/Naira exchange rate and interest rates.
“These two, in particular, affect the debt stock and debt service.”
Oniha further explained that the increase in Naira in Terms of N24.33 trillion between the fourth quarter of 2023, and the first quarter of 2024, did not strictly represent new borrowing.
She said that the total external debt stock was relatively flat at 42.50 billion dollars and 42.12 billion dollars in the fourth quarter of 2023, and the first quarter of 2024 respectively.
She continued: “The Naira values were significantly different at N38.22 trillion and N56.02 trillion, respectively, representing a difference of N17.8 trillion.
“This explains the perceived sharp increase of N24.33 trillion in the total debt stock in the first quarter of 2024.
“The difference in the exchange rate for the two periods also explains why, in dollar terms, the total debt stock declined in the first quarter of 2024 to 91.46 billion dollars.”
