Nigeria’s heavy external borrowing unfortunate – cleric

…as public debt hit $81.274bn by March 2019

Ben Eguzozie, in Calabar

Nigeria’s rising foreign debt and continued borrowing is rather unfortunate and worrisome, and it indicates that government has mortgaged the greater part of the future of Nigeria, said Tunde Adeleye, the bishop of the Niger Delta province of the Anglican Communion, in Calabar, Cross River State.

According to Adeleye, “Nigeria is currently indebted to various (foreign) financial institutions to the tune of not less than $28.38 billion as at May, 2019. IMF [International Monetary Fund] says we should not borrow more. But the (Federal) Government says they have not even borrowed enough.

“As at now, the Federal Government is saying clearly that this huge amount of (foreign) debt is very well within manageable margins and limits. This is very unfortunate,” the Anglican cleric lamented, while addressing the press in Calabar shortly before the communion’s just-ended 2019 synod.

Findings by business a.m. indicate that Nigeria’s public debt has continued to increase since March 2015, racking up to $81.274 billion – some N24.947 trillion as at March 31, 2019, according to figures posted by the Debt Management Office (DMO) on its website in July this year.

The DMO said the nation’s external debt grew by N101.646 billion as at end of March, 2019; while total public debt grew by 2.30 percent, when compared to the N24.387 trillion ($79.274 billion) as at December 2018.

However, the debt office said, the public debt to gross domestic product (GDP) ratio was 19.03 percent, and therefore, still falls within the 25 percent debt limit target by the Federal Government.

It also said, in relation to debt management strategy, the ratio of domestic debt to external debt stood at 68.49 percent to 31.51 percent at the end of March 2019.
According to analysis by Africa Check (Africa ckeck.org) in 2017, Nigeria’s public debt has continued to rise since March 2015, when it was $63.50 billion at official exchange rate at the time, N196.95 to the dollar. It rose to $73.2 billion as at June 2018, which included a US$2.5 billion Eurobond issued by the government in February 2018, using the Central Bank of Nigeria (CBN) 2018 exchange rate of N305 to the dollar.

Africa Check said that reactions from the DMO justified the debt as relatively low vis-à-vis the country’s GDP in 2017.

But the agency said that the increased funding requirement needed to sustain the economic recovery, address the huge infrastructural deficits, as well as meet budget financing requirements, would entail enormous funding resources.