DMO: Public debt increased by N692bn in three months — hits N32.91trn

The Debt Management Office (DMO) says Nigeria ended the year 2020 with a public debt stock of N32.91 trillion.

This means that public debt increased by N692 billion in the fourth quarter of 2020 compared to N32.223 trillion at the end of September 2020.

In a statement on Monday, DMO said the debt to the gross domestic product (GDP) ratio as of December 31, 2020 was 21.61 percent.

This, it explained, is within Nigeria’s new borrowing limit of 40 percent.

The debt figures includes the debt stock of the federal and state governments, as well as, the federal capital territory.

The DMO said the level of new borrowing at the federal level has reduced since the 2017 exit from recession.

It attributed this to efforts by the federal government to moderate the rate of growth in the public debt stock in order to ensure debt sustainability.

It said the loans acquired to finance budget deficits declined 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 budget.

DMO explained that the trend was reversed in 2020 due to the economic and social impact of the COVID-19 pandemic as new borrowing in the revised 2020 appropriation act increased to N4.2 trillion.

“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 ($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.”

DMO further said the various initiatives of the federal government to increase revenues such as the strategic revenue growth initiative and the Finance Act, 2020, should help shore up federal government’s revenue and reduce the debt service to revenue ratio.