Data from the Debt Management Office show that the nation’s total public debt increased by 4.52 per cent in the first three months of the year.
The public debt increased from N21.73tn ($71bn) in December 2017 to N22.71tn ($74.28bn) at the end of the first quarter of 2018.
The DMO said in a circular on Wednesday that the increase was largely accounted for by the increase in the domestic debts of states, and the Federal Capital Territory, Abuja.
It added that the $2.5bn Eurobond issued in February 2018, with its proceeds still being deployed to redeem maturing domestic debt, was also responsible for the increase in the total public debt.
The DMO said, “The debt figures show that the implementation of the debt management strategy, which entails an increase in the external debt stock through new external borrowing and the substitution of high-cost domestic debt with low-cost external debt, is achieving the desired results in several areas.
“Some of these areas are: the share of the external debt stock in the total public debt, which rose to 30 per cent as of March 31, 2018, compared to 17 per cent in 2015, 20 per cent in 2016 and 27 per cent in 2017; a decline in market interest rates from 13 to 14 per cent per annum in December 2017, to 11 to 13 per cent per annum in the first quarter of 2018 due to the redemption of N279.67bn of Nigerian Treasury Bills using some of the proceeds of the $2.5bn Eurobond issued in February 2018.”
According to the DMO, the government is actively enabling the private sector through the instrumentality of financial markets to play a leading role in the economy.
It added that while the redemption of NTBs made more funds available to banks for lending to the private sector, the decline in interest rates implied lower cost of borrowing for the private sector.
Data from the DMO also showed that the public debt was made up of N12.6tn of domestic debt (owed by the Federal Government), N3.384tn of domestic debt (owed by states and the FCT), and $22.07bn (N6.746tn) of external debt.