The Federal Government of Nigeria has spent a total of N612.7 billion between January and March 2021, to service domestic debts, latest data from the Debt Management Office (DMO) reveals.
The breakdown of the data revealed that the sum of N219.3 billion was used to service domestic debts in January 2021, while a further N123.09 billion was spent in February. Additionally, the sum of N270.33 billion was spent in the month of March for the same purpose, thereby raising the total amount used to service domestic debt to a cumulative of N612.7 billion in the first three months of the year.
On the other hand, the data revealed that Nigeria repaid a principal sum of N31.44 billion out of a total of the N16.51 trillion domestic debt owed by the Federal Government as of 31st of March, 2021.
Further insights into the data during the period under review, revealed that of the domestic debts instrument listed, the Federal Government of Nigeria Bonds got the lion share in terms of domestic debt servicing, gulping a total of N537.78 billion. It was followed by NTBs with a share of N35.03 billion and FGN Sukuk Rentals with N8.16 billion.
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Empirically, analysts at naijabusiness.com.ng opined that the amount spent on the domestic debt servicing of the various debt instruments, is directly proportional to the level of its relative indebtedness. For example, a careful study of the trend revealed that the higher the level of indebtedness to a particular domestic debt instrument, the higher it demands to service such debt instrument.
In light of this, naijabusiness.com.ng uncovered the fact that as of March 31, 2020, the FGN Bonds sits atop in terms of the total domestic debt profile (75.48%), as the country currently owes a total of N12.47 trillion in local bonds. This is followed by the Nigerian Treasury Bills (NTB) with a share of 15.77%, translating to a debt profile of N2.6 trillion. Recall that Naijabusiness.com.ng had earlier reported that as at December 2020, Nigeria’s total debt profile increased from N32.916 trillion to N33.1 trillion, indicating a marginal increase of about 0.58% between the periods under review.
