Statistics have shown that in the last two years Federal Government of Nigeria, under President Muhammadu Buhari and the 36 States including the FCT, have borrowed N7.51trn.
Analysis of the debt statistics from May 29, 2015, when the current leaders took over power, to June 30, 2017, showed that the country’s total debt had risen from N12.12tn to N19.63tn. This means that the country’s debt rose by N7.51tn within a period of two years.
A statement by the Debt Management Office (DMO) says the Debt Management Strategy 2016-2019 targets the rebalancing of the debt portfolio from its composition of 84:16 (domestic to foreign) to 60:40 by the end of December 2019 (domestic to foreign).
“It supports the use of more external finance for funding capital projects, in line with the focus of the present administration on speeding up infrastructural development in the country, by substituting the relatively expensive domestic borrowing in favour of cheaper external financing”
In addition, “The reduction in the level of the FGN’s borrowing from the domestic market will result in a reduction in domestic interest rates and free up borrowing space in the economy, particularly for private sector borrowers”.
Meanwhile, $3bn from refinancing will represent an injection of foreign exchange into the economy, which will in turn boost the country’s external reserves.
However, an approval from the National Assembly would be obtained for the proposed refinancing before implementation, in line with the Debt Management Office Act, 2003.