The International Monetary Fund (IMF) has expressed worry over Nigeria’s ability to repay its foreign debt which had continued to rise. Though it said conditions were favourable for the country to continue to borrow, the IMF equally expressed worry over the capacity to repay.
The Financial Counsellor and Director, Monetary and Capital Markets Department, IMF, Tobias Adrian, while presenting the Global Financial Stability Report at the ongoing joint spring meetings with the World Bank in Washington DC, said: “Nigeria has been borrowing in international markets but we worry. So, on the one hand, that is very good because it allows Nigeria to invest more; but on the other hand, we do worry about rollover risks going forward.
“At the moment, funding conditions in economies such as Nigeria and other sub-Saharan African countries are very favourable but that might change at some point. And there is a risk of rollovers and there is the risk of whether these needs for refinancing can be met in the future.”
Recall that Nigeria’s total debt profile as of December 31, 2018, stood at N24.387tn. The figure swelled by 12.25 per cent from N21.725tn in 2017 to N24.39tn in 2018.
The Debt Management Office said the debt rose by N2.66tn from December 31, 2017 to December 31, 2018. Statistics provided by the DMO showed that the country’s public debt rose from N21.73tn in 2017 to N24.39tn within the one-year period. According to the DMO, the year-on-year growth of public debt show 12.25 per cent within the one-year period.
The IMF anxiety over Nigeria’s debt followed a similar worry expressed by the National Bureau of Statistics, which disclosed that Nigeria’s foreign debt stood at $25.27 billion as at December 31, 2018. The NBS in a report titled: “Nigerian Domestic and Foreign Debt data” for 2018 fourth quarter posted on its website, said disaggregation of Nigeria’s foreign debt showed that $11.01 billion of the debt was multilateral.
The NBS said $34.63 million was bilateral from Agence Francaise de Development and another $2.75 billion bilateral from the Chinese Exim Bank, Japanese International Cooperation Agency, KFW Development Bank and India. In addition, the report said $11.17 billion were basically Eurobonds and Diaspora Bonds.
According to the report, Lagos State has the highest foreign debt profile among the 36 states and the FCT, accounting for 5.64%. It said Edo State has the second highest debt, accounting for 1.09%, followed by Kaduna State (0.90%) and Cross River State with 0.75%.
Similarly, the bureau said total domestic debt was N16.63 trillion in the quarter under review. It said Lagos State accounted for 3.19% of the total domestic debt stock while Yobe State had the least debt stock in this category with a contribution of 0.17% to the total domestic debt stock.
