Nigeria Owes World Bank Group $7.8b

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Nigeria Owes World Bank Group $7.8b

A new report has shown that Nigeria owes 51 per cent of its cumulative $15.35 per cent external debt to the World Bank Group.

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A report by FBN Capital research titled: ‘External Debt Ratios to Savour’  said the Federal Government of Nigeria’s (FGN’s) external debt obligations at end-September amounted to $15.35 billion, equivalent of 3.9 per cent of 2016 Gross Domestic Product (GDP).

The investment and research firm said the increase over third quarter debt statistics amounted to just $300 million, consisting largely of disbursements by the soft loan windows of the World Bank and the African Development Bank, and by the Agence Française de Développement (the French state investment bank).

Nigeria will next month be raising $3 billion from the Eurobond market to help fund part of the 2017 budget. “The point to be made, amid some uninformed commentary about the FGN’s return this month to the Eurobond market to raise $3 billion, is that concessional loans are still available. The external debt stock of Angola, which has also been downgraded by Moody’s to B2, was an estimated 42 per cent of GDP in 2016,” it said.

The FBN Capital explained that annualising interest and fee payments made on Nigerian external debt in the third quarter would bring external debt service to 4.3 per cent on the basis of mid-2017 stocks.

Also, the Office of the Accountant-General of the Federation (OAGF) data for first half of 2017 show domestic and external interest payments by the FGN at N872 billion and N56 billion respectively.

“The FGN has tapped the Eurobond market again to cover the larger part of its 2017 external borrowing target. If it is to tackle the structural flaws of the Nigerian economy, it has to borrow because transforming its non-oil revenue collection is at best a medium-term project. For reasons we have indicated and others, it makes sense to borrow externally,” it said.

The FGN’s next step is the externalisation of longer-tenor Nigerian Treasury Bills up to a ceiling of $3 billion, which has been approved by the National Assembly.

Data made available by the Debt Management Office (DMO) showed that Nigeria’s debt stock has hit N20 trillion – as at September 30.Domestic debt accounts for 76.96 per cent of this figure while foreign debt accounts for 23.04 per cent.

In figures, domestic debt stood at N15.679 billion, an increase of 4.1 per cent from the N15.034 trillion recorded in June. Foreign debt stood at N4.694 trillion, a rise of 1.9 per cent above the N4.602 trillion as at June 30.

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