Nigeria’s External Debt Service Cost Drops by10.15% in Q2

The amount that Nigeria spent to service its external debt stock dropped by 10.2 per cent to $202,373.63 as at the second quarter of 2018, compared with the $225,253.15 it was in the first quarter of same year.

A breakdown of the country’s debt service cost was posted on the Debt Management Office Nigeria (DMO) website, in a report titled, ‘Actual External Debt Service Payments in Second Quarter 2018.’

These included multilateral, bilateral, commercial and Eurobond debts.

The report showed that the cost to service commercial debts and Eurobond obligations rose, while the amount spent to service multilateral and bilateral obligations dropped.

The highest increase was from bond obligations which saw a significant increase of 132 per cent, from $45.63 million in the first quarter to $105.93 million in the second quarter.

The federal government obligations at the Eurobond market totalled $8.8billion which was inclusive of the $300 million Diaspora bond.

The cost to service commercial obligations of the country stood at $114.37 million in the second quarter, higher than $104.69 million which it was in the first three months of the year.

In addition, the cost to service multilateral obligations was down from $60.03 million in the first quarter, to $51.15 million while that of servicing bilateral obligations dropped from $60.5 million to $16.02 million.

The DMO recently put the nation’s total debt stock (federal, FCT and states) at N22.38 trillion ($73.21 billion) as at June 30, 2018.

The debt office also said the federal government had so far borrowed a total of N410 billion locally to finance the N9.12 trillion 2018 Budget, which was assented to on June 19 by President Muhammadu Buhari. According to the DMO Director General, Ms. Patience Oniha, there had been no foreign borrowing so far to support the 2018 budget.

This, she noted, was because the National Assembly was yet to approve the 2018 borrowing plan.

Oniha had said, “Our borrowing is not excessive. It goes through a rigorous process. If the government did not borrow so much in the last three years, it would not have been able to function. The huge borrowings sprang from the fall crude oil revenue and the attendant devaluation of the naira.

“Even at that, the DMO does annual debt sustainability analysis. A group of finance and economic experts do this. They project up to 20 years forward.

“They adjust some variables like if oil price falls, if production crashes and all that. They consider all the ‘what ifs’.

“The overall objective is to ensure that Nigeria’s debt is sustainable, and this