The Debt Management Office (DMO) has said the total debt owed by Nigeria, which includes the federal and state governments as well as the Federal Capital Territory (FCT) stood at N32.9 trillion as at December 31, 2020.
In a statement issued by the agency, it was disclosed that the total debt to Gross Domestic Product (GDP) of the nation in the period under review stood at 21.61 per cent.
According to the DMO, the 21.61 per cent debt-to-GDP is still within Nigeria’s new limit of 40 per cent, noting that the various initiatives of the government to increase revenues such as the Strategic Revenue Growth Initiative and the Finance Act 2020 should help shore up the government’s revenue and reduce the debt service to revenue ratio.
According to the statement, the debt would have been lower if not for the COVID-19 pandemic, which affected Nigeria and many countries across the globe.
The debt office said the N4.20 trillion borrowed by the federal government to partly finance the 2020 appropriation act was the highest in recent years.
“Many countries including the advanced countries also increased their level of borrowing as a result of COVID-19,” the agency argued.
“It should be noted though, that apart from the new domestic borrowing of N2.3 trillion, the other new borrowings were concessional loans from the International Monetary Fund (IMF) of $3.34 billion and other multilateral and bilateral lenders.
“This incremental borrowing to part-finance the 2020 budget and the additional issuance of promissory notes to settle some arrears of the Federal Government of Nigeria, contributed to the increase in public debt stock.
“New domestic borrowings by state governments also contributed to the growth in the public debt stock,” the statement disclosed.
The DMO said since Nigeria exited the first recession under the current administration of President Muhammadu Buhari in 2017, the level of new borrowing at the federal level as shown in the annual budgets had been declining as part of the government’s measures to moderate the rate of growth in the public debt stock in order to ensure debt sustainability.
“New borrowing to part-finance budget deficits had declined steadily from N2.36 trillion in 2017 to N2.01 trillion in 2018, N1.61 trillion in 2019 and N1.59 trillion in the first 2020 appropriation act,” the debt office said.
