28 December 2012

Nigeria: World Bank - Nigeria, Others Record U.S.$4.9 Trillion External Debt

The combined external debt stock for Nigeria and other developing countries increased by $464 billion to $4.9 trillion at the end of 2011, a report by the World Bank has shown.

The report also revealed that net external debt inflow to developing countries fell by nine per cent in 2011 to $465 billion, from $434 billion in 2010, due to the sharp contraction of funds from official creditors.

The World Bank stated these in its latest "International Debt Statistics 2013," obtained by THISDAY Thursday.

According to the report, at $434 billion, net inflow from private creditors was almost identical to 2010 level, but with an important shift in composition: net short-term debt inflow contracted by 27 per cent, while medium and long-term financing from commercial banks tripled to $110 billion.

"Net external debt inflow and aggregate net capital inflow (debt and equity) to developing countries fell in 2011, driven by a sharp contraction in net inflow from official creditors and a collapse of portfolio equity flows. The downturn was partially offset by inflow from commercial banks, sustained access to international bond markets and a rise in foreign direct investment," the Washington-based institution explained.

The external debt stock, the report stressed, was moderate in relation to Gross National Income (GNI), and to exports (an average of 69 per cent).

"Short-term debt constituted 26 per cent of debt stock but risks were mitigated by international reserves, equivalent to 121 per cent of external debt stock at end 2011. Aggregate net capital inflow (debt and equity) also fell nine per cent in 2011 to $1.107 trillion (4.9 per cent of GNI), compared with $1.211 trillion in 2010 (6.2 percent of GNI), but stayed close to their pre-crisis peak of $1.180 trillion in 2007.

"The downturn was due to the collapse in portfolio equity flows, which fell to $2 billion, (compared to an inflow of $120 billion in 2010). Meanwhile, foreign direct investment continued on an upward trajectory, rising by 11 per cent in 2011 to a record high of $644 billion.

"China received 27 per cent of net debt and 35 per cent of net equity flows to all developing countries in 2011. When China is excluded, net external debt inflows and aggregate net capital inflows to developing countries fall 13 percent and 3 percent respectively in 2011, compared with 2010," it explained.

Commenting on the statistics, Senior Information Officer in the Bank's Data Group, who was part of the team that produced the report, Ibrahim Levent said: "These international debt statistics are a vital input for experts working to improve the management of capital flows around the world and having the data open to all is a welcome development."

The International Debt Statistics 2013, according to the World Bank, contains comprehensive data from developing as well as high-income countries. The statistics succeed the World Bank's publication, Global Development Finance (2010-2012), Global Development Finance, Volume II (1997 through 2009), and its precursor, World Debt Tables (1973 through 1996).

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