Nigeria services domestic debt with N2.05trn in 2021 — DMO

Nigeria spent a sum of N2.05 trillion to service its domestic debts in the year 2021, representing an increase of 10.8per cent compared to the N1.85 trillion incurred in the previous year

This is according to the report on Nigeria’s debt service, released by the Debt Management Office (DMO).

A further look at the data showed that a sum of N1.66 trillion was paid as interest on federal government bonds, which accounted for 80.8per cent of the total amount incurred on domestic debt service. The amount spent on servicing domestic debts in 2021 is the highest on record.

Meanwhile, Nigeria’s domestic debt profile rose by N3.49 trillion in the review period to N23.7 trillion as of December 2021 from N20.21 trillion recorded in the previous year. Domestic debt accounted for 59.9per cent of Nigeria’s total debt profile, while external debt represents 41.1per cent of the total.

The rise in the country’s debt profile is attributed to the N5.6 trillion budget deficit for the review year by the Federal Government. Recall that the federal government signed a budget of N13.59 trillion for 2021, which needed a sum of N5.6 trillion to fund the budget deficit.

The budget deficit for the year informed the need for a N2.34 trillion new loans each from both domestic and foreign sources, N709.69 billion multilateral/bilateral loan drawdowns and N205.15 billion privatisation proceeds.

A cursory look at the breakdown of Nigeria’s domestic debt service, a sum of N81.81 billion was incurred as charges for Nigerian treasury bills, accounting for 4per cent of the total amount. In the same vein, a sum of N219.41 billion was paid back as part of the principal for promissory notes, while N25 billion was paid for treasury bonds.