Ruby Rabiu
23 July 2008
It will take Nigeria another ten years to pay its current $3.01 billion external debt, the Debt Management Office (DMO) has said.
The debt service payment, according to a DMO annual report and financial statement for 2007 obtained by Daily Trust yesterday, will decrease progressively up to 2016 and "this is as a result of loans that would fall after the grace period."
Multilateral debt profile of the country as at December 31, 2007 amounted to $3.01 billion or 84.31 percent of the total external debt stock of $3.7 billion at the period under review.
According to the DMO's report, out of the $3.01 billion indebted to multilateral creditors, $2.4 billion was on concessional basis while $722. 3 million was non-concessional.
A debt is said to be concessional when the lending is extended by creditors at terms that are below market terms with the aim of achieving a certain goal.
Concessional creditors to Nigeria include the International Development Association (IDA) with $1.9 billion, International Fund for Agricultural Development (IFAD) with $49 million, African Development Fund (ADF) with $222.9 million and the European Development Fund (EDF) with $146 million.
The non-concessional creditors, according to the DMO, include the International Bank for Reconstruction and Development (IBRD) with $368.5 million and the African Development Bank (ADB) with $353.8 million.
"In 2007, total multilateral debt increased by $472.61 million, or 18.12 percent, compared to the value as at 31st December 2006, mainly due to the depreciation of the US Dollar against other currencies of the portfolio", the report stated.
Also revealed in the report was that out of the $3.7 billion external debt stock of the country, the Federal Government owed $2.1 billion or 57.86 percent while the remaining $1.5 billion is owed by the states government and the Federal Capital Territory (FCT).
According to the report, only the Federal Government owed the Non-Paris Club Creditors amounting to $573.3 million while state governments and the FCT were indebted only to multilateral creditors.
"Among the state governments, the data reveals that Lagos State owed the largest debt amounting to US$243.28 million or 6.66 percent of the total external debt, followed by Oyo State with US$108.92 million or 2.98 percent and Cross River State with US$94.44 million or 2.58 percent. The least indebted was the FCT with US$12.20 million or 0.33 percent of the total", the report stated.
On the home front, the country's domestic debt as at December 31, 2007 stands at N2.2 trillion, compared to N1.8 trillion in December 2006, representing an increase of N416.4 billion or 23.75 percent.
"The increase is attributed to securitisation of local contractors' debt, deficit financing and settlement of entitlements of ex-staff of the defunct Nigeria Airways, among others", the 2007 financial report of DMO stated.
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