Nigeria’s total public debt increased quarter-on-quarter by 7.2 per cent or N2.540 trillion to N38.005 trillion in the third quarter of 2021 from N35.565 trillion in the second quarter of this year.
This was revealed by the Debt Management Office (DMO) in a statement released on Tuesday night.
The agency explained that the amount comprises the debts incurred by the federal and state governments from both external and internal sources.
In Dollar terms, the debt office stated that the total debt of the nation stood at $92.626 billion at the end of Q3 2021 compared with $86.678 billion it was at the end of Q2 2021.
According to the DMO, the increase in the debt was a result of the $4.0 billion Eurobond issued by the federal government in September following the approval of the National Assembly.
The exercise attracted investors from Europe, America as well as Asia and the paper was issued in tranches of three tenors: $1.25 billion for seven years at a yield of 6.125 per cent, a 12-year bond at 7.375 per cent worth $1.5 billion, and a 30-year tranche of $1.25 billion sold at 8.25 per cent.
The Eurobond was part of the government’s plan to raise $5.71 billion in external financing to help fund spending in 2021 and to partly finance the N5.6 trillion deficit.
The DMO had initially wanted to sell $3 billion worth of the note, but because of the strong appetite of investors, it increased the bond offer by $1 billion.
This action consequently raised Nigeria’s total public debt to N38.005 trillion amid harsh criticisms over the penchant of President Muhammadu Buhari administration for borrowing.
But the debt office in the statement issued today said, “The issuance of the $4 billion Eurobonds has brought significant benefits to the economy by increasing the level of Nigeria’s external reserves, thereby supporting the Naira exchange rate and providing the necessary capital to enable the federal government finance various projects in the budget.
“The triple tranche $4 billion Eurobond, issued in September 2021, was for the implementation of the new external borrowing of $6.18 billion in the 2021 Appropriation Act.”
Featured Image Credit: Pius Utomi Ekpei/AFP via Getty Images
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