Nigeria’s debt stock increased by N1.327 trillion between September 2017 and December 2017.
This is according to figures provided by Patience Oniha, director general of the Debt Management Office (DMO), on Wednesday at a press conference in Abuja.
Oniha said the federal government is planning to reduce domestic debt to 60 percent to the total debt stock from the present 73 percent.
“The key benefits of the restructuring of the portfolio are the reduction of the government’s debt-service costs, lowering of interest rates in the domestic market and improved availability of credit facilities to the private sector,” Oniha said.
“Our projection is that from two sources, the borrowing should be dropping in the medium term. The rate of increase will be much slower, and instead of borrowing 17-18 percent from the domestic market, we’ll do 7 percent from external sources.”
She said Nigeria had to increase borrowing because the output and price of crude fell in 2014, which reduced government revenue and eventually plunged the economy into its worst recession in 25 years.
The Muhammadu Buhari-led administration made efforts to stimulate the economy by increasing spending.
Speaking further at the briefing, Oniha said the country’s public debt is sustainable at 18.2 percent of the gross domestic product.
According to the DG, Nigeria spent N1.6 trillion out of its 2017 budget of N7.2 trillion on servicing debt. She said nine percent of this was spent on foreign debts while the rest was spent on local loans.
Kemi Adeosun, minister of finance, had said the proceeds from the last Eurobond issued in 2017 will be used to refinance debts from the previous administration.