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Whither Nigeria’s Debt?
Sep 20, 2020
Nigeria seems to be headed for a debt trap as all key debt performance measuring indices have fallen below minimum global standards. The implication, according to pundits, is that the country may not be able to meet its debt service obligations nor meet its obligation to the citizenry through funding of its capital and recurrent expenditure before long. Bamidele Famoofo reports
As at end of June 2020, Nigeria’s ever rising debt portfolio has gone up to N31trillion. That amount is big enough to finance Nigeria’s revised N10.8trillion budget almost three times. But since it is not revenue, but liability, the country would have to sweat it out to pay back in the face of dwindling revenue.
According to the figures released by the Debt Management Office (DMO) on the nation’s debt stock as at second quarter of 2020, debt increased by N2.38 trillion over a three months period. The composition of the debt portfolio showed that it was made up of $3.3 billion budget support loan from the International Monetary Fund (IMF) to cushion the effect of the pandemic on the economy and the rest represent planned borrowings from the African Development Bank, The Islamic Development Bank and the Sukuk promissory notes based borrowings.
But while debt rises on a consistent basis, revenue is moving southward. According to President Muhammadu Buhari, the revenue inflow into economy had been negatively impacted, standing at an estimated 60 per cent. Buhari made this known during a recent ministerial retreat in Abuja to undertake one year review of the performance of the economy under his second term administration.
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