Nigeria Spends N977bn on Debt Servicing in One Month, Says CBN

• Local debt servicing gulped N977 billion in June 2021 according to a half-year report released by the Central Bank of Nigeria (CBN)
• It represents an uptick of about 8.7 per cent in comparison to N898.39 billion spent on domestic debt servicing in the period last year
• The report showed that the increase was caused by the federal government's appetite for more borrowing

The Nigerian government has spent N977.03 on internal debt servicing as of June 2021. This represents about 8.75 per cent in comparison to N898.39 billion in the same period last year.

According to a Nairametrics report, the Financial Markets Department of the Central Bank of Nigeria (CBN) said this in its half-year activity report for 2021.

Nigeria’s domestic debt stock outstanding saw an uptick trend in the first half of 2021 in comparison to the same period in 2020.

Read also

1 day to end of 2021, Lagos Assembly passes slightly increased 2022 appropriation bill

The cost of debt servicing went up by 8.7 per cent due to the increase in the federal government's borrowing.

What the report is saying

The report indicated that the Nigerian government's shored up its revenue deficit with public financing. The stock of FGN domestic debt outstanding amounted to N17,631.80 billion at the end-June 2021.

According to the report, this meant an increase of N2,176.10 billion or 14.08 per cent above N15,455.70 billion, recorded at the end of June 2020.

FGN bonds increase FG's revenue

At this period in review, the Nigerian government's Bonds worth N900.00 billion was given, while public subscription and sale stood at N1,726.40 billion and N1,415.00 billion, respectively

FGN Bonds, subscription and allocations amounted to N615.00 billion, N2,449.97 billion and N1,308.58 billion in the same period. The increase in offer and allotment in the first half of 2021 was due to the government’s aggressive drive to fund the fiscal deficit from the local market.

Read also

Breakdown of Nigeria's borrowing plans for three years as President Buhari is set to leave behind N50trn debt

Debt triples in seven years

Legit.ng reports that Rights activist, Chidi Odinkalu, has said Nigeria’s debt profile has increased three times in the last seven years, that is since Muhammadu Buhari mounted the saddle as Nigeria’s president.

Odinkalu said this in a tweet but did not expatiate as he only provided an undated chat from the Nigeria Bureau of Statistics (NBS).

Odinkalu may not be an economist but available data from Debt Management Office (DMO) says Nigeria’s debt profile has soared to about N35.65 trillion recently because of increased borrowing by Buhari's government.

Source: Legit.ng