The Federal Government spent a total of $1.08bn (N400.90bn) on external debt servicing between January and September 2019. Data obtained from the Debt Management Office revealed that in the nine-month period, $279.63m (N103.46bn) was paid to multilateral sources such as the International Bank for Reconstruction and Development and the International Development Association.
A total of $152.2m (N56.31bn) was paid to bilateral sources such as the Export-Import Bank of China and the Export-Import Bank of India. Commercial sources such as Eurobond Investors received $630.81m (N233.40bn) as interest while $20.86m (N7.72bn) was paid for other debt items such as agency fees. Analysis of the data revealed that the highest amount was used to service debt from commercial sources, which represented 58.22 per cent of the total amount.
Servicing of debt from multilateral sources constituted 25.81 per cent of the total amount while that from bilateral and other sources constituted 14.05 per cent and 1.93 per cent respectively. A comparison of all the quarters showed that the highest amount of $473.94m (N175.36bn) was spent in the third quarter of the year. The DMO gave the breakdown of the amount to include $134.38m (N49.72bn) for multilateral sources, $76.52m (N28.31bn) for bilateral sources and $263.04m (N97.32bn) for commercial sources.
In the second quarter of the year, the Federal Government expended $252.30m on foreign debt servicing. Of the $252.30m paid, $65.85m (N24.36bn) was paid to multilateral sources; $8.58m (N3.17bn) was paid to bilateral sources, $157.01m (N59.09bn) was paid to commercial sources and $20.86m (N7.72bn) was paid to other sources.
In the first quarter of the year, the Federal Government spent $357.26m (N132.19bn) on debt servicing. The DMO said $79.40m (N29.38bn) was paid to multilateral sources, $67.10m (N28.83bn) was paid to bilateral sources and $210.76m (N77.98bn) paid to commercial sources. The DMO had said the Federal Government and the 36 states, as well as the Federal Capital Territory, owed a total N26.22tn as of September 30, 2019.
The Director-General, DMO, Patience Oniha, said the devaluation of the exchange rate brought about by economic downturn, considerably hiked the country’s debt profile. She stated that new borrowings were reducing and that the Federal Government was trying to reduce the cost of borrowing.