The Debt Management Office (DMO) said yesterday that Nigeria’s external and domestic total debt rose to N12.60 trillion ($65.42 billion) as of December 2015, up from N11.2 trillion in 2014. This is as the country grapples with a slump in oil price that has slashed government revenues.
The debt office said on its website that foreign bonds and loans stood at $10.7 billion at the end of December, equivalent to about 16 percent of total debt and up from $9.71 billion at the end of 2014.
Africa’s biggest economy is planning to borrow as much as $5 billion to help fund its budget deficit due to the plunge in oil, which has DMOalso sent the naira currency into a tailspin, Reuters report.
Naira yesterday closed stable against the US dollar at the parallel market with slight depreciation at the autonomous and inter-bank markets.
BusinessDay checks revealed that naira closed at N306 against the dollar the same as on Tuesday at the parallel market.
However, it weakened slightly by N0.50k/$ or 0.16 percent as it closed at N304.50k/$ compared to N304/$ the previous day at the autonomous market.
At the inter-bank foreign exchange market, naira dropped slightly against the greenback by N0.09k or 0.05 percent, closing at N199.38k/$ as against N199.29k/$ the previous day according to data from FMDQ.
The CBN’s clearing rate remained unchanged, closing at N197.00k/$ at the inter-bank foreign exchange as seen on FMDQ website.
The African Development Bank (AFDB) on Tuesday said the West African nation has asked the bank for a loan of $1 billion to help fund the deficit.
Nigeria expects a deficit of 3 trillion naira ($15 billion) in 2016, up from an initial N2.2 trillion ($11 billion) estimate.
But the continuous drop in oil prices has left Abuja’s ability to pay bills and fund new projects in doubt, with rising domestic debt obligations. Local debt rose to 8.83 trillion naira last year, up from N7.9 trillion in 2014.
In 2014, Nigeria rebased its GDP, almost doubling the size of its output to more than $500 billion to become the largest economy in Africa. But a weaker naira caused by the fall in oil prices has lowered its growth. Output for 2014 finished at $453 billion, leaving total debt at around 14 percent of GDP.
Finance Minister Kemi Adeosun said this week Nigeria had held exploratory talks with the World Bank and looked at options to borrow from the AFDB and China Exim Bank.
Adeosun said that about $4 billion might come from international institutions and the remainder from Eurobonds.
In December, President Muhammadu Buhari, presented a 6.08 trillion naira ($30.6 billion) budget for 2016 to parliament, an increase from 4.4 trillion naira for 2015, which Buhari’s hopes will help tackle an economic crisis confronting Africa’s top oil producer. Lawmakers aim to pass the budget this month.
