Lagos — The Debt Management Office (DMO) on Sunday in Abuja said the nation's external debt profile now stands at 3.5 billion US dollars, down from the 38 billion dollars owed creditors before 2006.

The country was burdened with a debt hangover of about $38 billion before 2006, but through negotiations, debt forgiveness and proper management the figure dropped to a sustainable level.

The DMO Director General Abraham Nwankwo, told the News Agency of Nigeria (NAN) that the domestic debt profile was N2.3 trillion.

According to him, both the domestic and the external debt profile constitute about 11 per cent of the Gross Domestic Product (GDP).

"As a developing country, we are still far from the threshold that should raise concerns on the economy and that threshold is when our debt profile is 30 per cent of our GDP, " he said.

Nwankwo said 84 per cent of the external debt was owed to multilateral institutions, like the World Bank and the African Development Bank (AfDB), pointing out that the loans were all concessionary.

"More than 84 per cent of the external debt is concessionary, borrowed from soft windows like the World Bank and the AfDB, and they have long term period of 40 years, with a 10-year moratorium.

"The interest rate is at 1.25 per cent so it is as good as you are not paying anything. And these loans were taken some 20 to 30 years ago.

"The burden of the loans on the country is very low and does not in any way put undue pressure on the economy, " he said.