The Federal Government declared yesterday that it was worried by the domestic debt stock and was working towards cutting it down from the current N5.96 trillion to about N500 billion by 2015. Coordinating Minister of the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, who spoke at a briefing on the 2012 budget in Abuja, put the nation’s total debt stock at $44 billion; giving the breakdown as $5.9 billion external and N5.6 trillion domestic.
She stated that although the nation’s external debt profile was not bad as to cause panic, the rising domestic debt portfolio was getting uncomfortable.
“Over the medium term, we aim to bring our recurrent down to about 65 per cent of the budget while increasing capital expenditure. Based on the above, the deficit is now N1.1 trillion or 2.85 per cent of GDP, which is within the 3 per cent GDP threshold set by the Fiscal Responsibility Act. Accordingly, the provision for domestic borrowing has now come down to N744 billion compared to N852 billion in the 2011 Budget. This is quite a big achievement.
“This underscores the necessity to control the rising domestic debt profile which has been a source of concern and I want to use this as an occasion to also say a word on the debt. We have provisioned N559.6 billion for domestic and foreign debt service. At present, our external debt stands at $5.9 trillion, while our domestic debt is N5.96 trillion. In naira terms, both domestic and external debt stand at N6.8 trillion or in dollar terms, $44 billion. In looking at this, we have to note that the various ratios which we monitor are in reasonable shape.
“Our debt to GDP is 17.8 per cent, which is far below the 30 per cent target that we have set for this economy and much below the 60 per cent of the target that is the international norm. Our debt service to revenue is 19 per cent as against the general norm of 30 per cent.