By Kayode Tokede
The Debt Management Office (DMO) has revealed that Lagos, Edo and Kaduna states top others in N8.32 trillion total external debt owned by state and federal government as at June 30, 2019.
The total external debt by 36 states include the Federal Capital Territory (FCT) closed 2018 at N7.75trillion in 2018.
The latest report by the Debt office revealed that Lagos state as at June 30, 2019 reported N435.46billion or $1.4 billion that comprises of $1.28 billion multilateral and $143.8million Bilateral (AFD).
According to the DMO report, Edo state has N85.09 billion or $277.7 million external debt while Kaduna state reported N68.56 billion or $223.76million multilateral debt as at June 30, 2019.
Further findings by Nigerian NewsDirect revealed that external debt of Cross River State moved to $148.8million and Oyo state moved to $136.5 million as at the period under review.
States with the lowest amount of external debt includes Borno state, $21.3million; Yobe state, $27.2million; Taraba state, $21.3 million and Benue state, $33.9 million as at June 30, 2019.
The report by the debt office, however, explained that the nation’s total public debt rose by N24.39 billion or 5.4 per cent in six to N25.7trillion as at the end of June 2019 from N24.39 trillion it closed in 2018.
The federal government owed N20.42trillion as of June 30, 2019, while the 36 states and the FCT had a total debt portfolio of N5.28trillon.
The debt stock is made up of N8.32trillion or $27.16billion external debt and N17.38trillion borrowed domestically, according to the DMO.
The nation’s public debt, which stood at N22.38trillion as of June 2018, increased to N24.39trillion in December 2018 and N24.95trillion in March 2019.
President Muhammadu Buhari early in the month at the joint session of the National Assembly said, “debt service is estimated at N2.45 trillion, and provision for Sinking Fund to retire maturing bonds issued to local contractors is N296 billion.”
He added that Nigeria as a country remains committed to meeting its debt service obligations.
He said, “Of the N2.45 trillion, 71 per cent is to service domestic debt which accounts for about 68 per cent of the total debt. The sum of N296 billion is provided for the Sinking Fund to retire maturing bonds issued to local contractors.
“I am confident that our aggressive and re-energised revenue drive will maintain debt-revenue ratio at acceptable and manageable levels. We will also continue to be innovative in our borrowings by using instruments such as Sukuk, Green Bonds and Diaspora Bonds.”
The Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, had said that the country did not have any debt challenge but a challenge with generating sufficient revenue.
According to her, “There is a lot of insensitivity around the level of our debt. I want to restate that our debt is not too high — what we have is a revenue problem. Our debt is still very much within a reasonable fiscal limit. In fact, among our comparative countries, we are the least in terms of borrowing.”
The Monetary Policy Committee of the Central Bank of Nigeria (CBN) said the headwinds to the growth prospects in Nigeria remain high unemployment, rising public debt and heightening insecurity across the country.
A member of the committee, Mr. Robert Asogwa in his personal statement said, “The huge concerns expressed in the last MPC meeting about the increase in total public debt remain unabated.
“Based on the Bond Issuance Calendar of the DMO, 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 late 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 remain the key to addressing the weak fiscal position of the economy.”
Also, another member of the MPC, Dahiru Balami noted that major risks and vulnerabilities to Nigeria were security challenges, slow economic growth, low government revenue, and, growing Federal and state government debts.
In addition, Mike Obadan in his personal statement at the end of September MPC meeting said the present fiscal and public debt positions are unsustainable.