Nigeria spent $1.09bn on debt servicing between January and September this year, a new report by the Central Bank of Nigeria has indicated. The international payment data by the CBN showed that debt servicing gulped a total of $1.28bn in nine months of 2018.
Punch also report that the CBN only services the Federal Government’s debts. It was gathered that in the first quarter of 2019, a total of $354.6m was spent to service debts. The amount dropped to $252.3m in the second quarter.
The CBN further disclosed that a total of $485.8m was spent to service debts in the third quarter of 2019. Month-on-month breakdown showed that the CBN in January spent $65.4m to service debts; it increased by 196 per cent to $193.4m in February; and dropped to $95.75m in March.
In April, the CBN disclosed that a $44.1m was spent on debt service; it moved to $189.67m in May, the second highest amount spent on debt service by the apex bank in one month. In June, the amount dropped to $18.57m; in July, it rose to $126m. For August and September, the figures reported by the CBN were $199.8m and $160m, respectively.
The data by the CBN also showed that in 2018, a total of N451.7bn or $1.47bn was spent on debt service. The apex bank in its financial stability report explained that the consolidated domestic debt stock of the Federal Government in December 2018 was N12.44tn.
According to the CBN, the amount reflected an increase of 2.40 per cent over the N12.15tn recorded at end-June 2018. The CBN noted that the FGN bonds constituted 73.41 per cent while the Nigerian Treasury Bills constituted 21.99 per cent.
The financial stability report added, “The FGB Sukuk and Green Bond respectively accounted for 1.61 and 0.09 per cent of the total domestic debt stock. The FGN special bonds, savings bonds and Nigerian Treasury Bonds accounted for 1.61, 0.09 and 1.21 per cent, respectively .”
The Monetary Policy Committee members of the CBN continued to express concerns over increasing debt and its vulnerability to the nation’s economy growth.
A member of the committee, Dr Robert Asogwa, in his personal statement, said, “Based on the Bond Issuance Calendar of the Debt Management Office, there were three additional FGN bond auctions in July, August and September to raise money to part-finance the 2019 federal budget while additional issuance of Eurobond is expected in the later part of 2019 or early 2020.
“As the threat of debt vulnerability continues, a coordinated domestic revenue expansion with simultaneous fiscal prudence as suggested in the last MPC meeting still remains the key to addressing the weak fiscal position of the economy.”
Another member, Prof. Dahiru Balami, said the major risks and vulnerabilities to Nigeria economy were security challenges, slow economic growth, low government revenue and growing federal and state government debts.
The Minister of Finance, Budget and National Planning, Zainab Ahmed, had said that Nigeria’s debt was not as worrisome as people thought. She insisted that despite the foreign and domestic debt stock, Nigeria had no debt crisis.
Another member of the MPC, Mr Mike Idiah, said the fiscal authority would need to appreciate the urgency of implementing fiscal reforms aimed at boosting non-oil revenue mobilisation significantly, particularly the tax revenue.