The Lagos Chamber of Commerce and Industry (LCCI) has said that Nigeria will continue to spend a large chunk of its earnings to service the total public debt stock of N25.7 trillion.
In its report on the 2019 Economic review and outlook for 2020 released to journalists on Monday, LCCI stressed that the debt stock jumped by 128 percent in the last eight years, without any impact on the economy.
“The Debt Management Office puts Nigeria’s total debt stock at N25.7 trillion as of June 30, 2019. This represents a three percent increase over N24.95 trillion owed as of March 31, 2019.
“Breakdown shows that N8.3 trillion or 32 percent of total debt stock is owed to external creditors while N17.4 trillion or 68 percent are domestic debt. Debt stock has jumped by 128 percent in the last eight years without a corresponding impact on the economy.”
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It added that the outlook for 2020 suggests that the country’s debt profile will trend upwards by 2020 based on three key factors: approval of $3 billion credit facility from World Bank for power sector reforms; possible ratification of $29.96 billion loan request for infrastructural development; ) wider fiscal deficit (2020: N2.7trn; 2019:N 2.1trn).
“However, the rising indebtedness of the economy calls for concern as increased debt stock failed to stimulate neither growth nor infrastructural development.
“Given Nigeria’s revenue challenges, the country will continue to spend a large chunk of its earnings to service debt.”
Meanwhile, the Federal Government on Monday, stressed that despite the debt figure, Nigeria is not in debt trouble as being circulated, insisting that the nation is within a reasonable debt to its Gross Domestic Product (GDP) ratio.
He decried that the country’s debt stock was being misrepresented by those he described as scaremongers.
“The public debt stock is actually a cumulative figure of borrowings by successive governments over many years. It is, therefore, not appropriate to attribute the public debt stock to one administration.
“Nigeria’s total public debt stock in 2015 was $63.80 billion, comprising $10.31 billion of external debt and $53.49 billion domestic debt. By June 2019, the total debt stock was $83.883 billion, made up of $27.163 billion of external debt and $56.720 billion domestic debt.”
“It is, therefore, not correct to say that Nigeria’s external debt alone is $81.274 billion. There is yet no cause for alarm.”