Nigeria’s total public debt stock stood at N46.25 trillion (about $103.11 billion) as at December 2022.
The Debt Management Office (DMO) made this known in its fourth quarter 2022 Report.
The debt stock is the total portfolio by the Federal Government, 36 state governments, and the Federal Capital Territory (FCT).
The DMO report came on a day the Federal Government dismissed report that the Chinese government had rejected its request for a $22 billion loan.
Director-General of the DMO Ms. Patience Oniha, told The Nation that the government remained unshaken.
She said: “Nigeria has several sources of funding… other countries and institutions don’t lend based on China. The ratio of 23.20 per cent is within the 40 per cent limit self-imposed by Nigeria, the 55 per cent limit recommended by the World Bank/International Monetary Fund and the 70 per cent limit recommended by the Economic Community of West African States.”
The figure reflects a 14.46 per cent increase when compared to the N39.56 trillion (N95.77 billion) recorded on 31 December, 2021.
In a statement analysing the debt profile, the DMO said that in terms of composition, total domestic debt stock amounted to N27.55 trillion (about $ 61.42 billion), while the total external debt stock peaked at N18.70 trillion ($41.69 billion).
It attributed the increase in the total public debt stock to new borrowings by the Federal Government and sub-national governments, primarily to fund budget deficits and execute projects, adding that the issuance of promissory notes by the FGN to settle some liabilities also contributed to the growth in the debt stock.
To cut the portfolio, the DMO said the government was stepping up efforts to increase revenues from oil and non-oil sources.
The DMO plans to drive the efforts through initiatives such as the Finance Acts and the Strategic Revenue Mobilisation Initiative that are expected to support debt sustainability.
The Office said the debt to Gross Domestic Product (GDP) ratio as at December 31, 2022, was 23.20 per cent, indicating a slight increase from the figure for December 31, 2022, which was put at 22.47 per cent.
“The ratio of 23.20 per cent is within the 40 per cent limit self-imposed by Nigeria, the 55 per cent limit recommended by the World Bank/International Monetary Fund, and, the 70 per cent limit recommended by the Economic Community of West African States,” the DMO said.
Giving another perspective to Ms. Oniha’s position, a DMO official, who craved anonymity, said the rejection of the loan request “:is not because we were no longer credit worthy or that China no longer has confidence in us as borrowers, but rather, with the COVID emergency several countries including China reviewed their exposures to other countries especially in terms of debt.
“So as part of that review, they dropped a few on-going loans and suspended some that have not even taken off so am sure this fell into that category. The only argument is to say perhaps the amount now on offer is lower than the original one”.
Asked how th Chinese loan rejection will impact Nigeria’s debt portfolio, the DMO official said: “We can’t calculate this into Nigeria’s existing debt, if anything it becomes a minus to the entire stock, but you know government will not rush to exclude it just because of this. “It’s a rejection alright but it can still happen perhaps under different terms in the future.”
He was confident that “it’s not like we can’t really pay our loan, we are working towards that, should we want money we can get it anytime” re-echoing what the Director General said earlier.
The National Assembly had approved the sum of $22,798,446,773 under the 2016–2018 Medium Term External Borrowing (Rolling) plan following a request for approval to raise funds for the Nigerian Railway Modernisation Project spanning (Kaduna–Kano segment) occasioned by the COVID–19 pandemic.
It is the facility for this project from China Exim Bank that the Chinese government withdrew its support to finance the project.
However, to secure funds for the project, the contractor, Chinese Civil Engineering Construction Company (CCECC Nigeria Limited), in collaboration with the Federal Ministry of Transportation, engaged China Development Bank to finance the project in the sum of $973,474,971.38.
On Tuesday, the House of Representatives voted to harmonise the terms of the facility as well as the change of financier from China Exim Bank to China Development Bank.
The House also approved the conditions provided in the harmonised term sheet as follows: Segment – Kaduna–Zaria–Kano; financier – China Development Bank; type of loan – commercial loan; maturity – 15years; currency – euro; interest rate – 2.7 per cent + 6 months Euribor; commitment fee – 0.4 per cent; and upfront fee – 0.5 per cent.