FG Debt Increases By N1.26trn

The Federal Government’s domestic debt outstanding rose by N1.26trn to N13.41trn as of June 2019, over the figure for the corresponding period of 2018.

This was disclosed in the Central Bank of Nigeria’s half year report on Federal Government’s domestic debt.

Part of the report read, “The total domestic debt outstanding at the end of June 2019 stood at N13.41tn, representing an increase of N1.26tn or 10.38 per cent, over N12.15tn in the corresponding period of 2018.”

It explained that the debt stock during the review period comprised the Federal Government of Nigeria’s bonds worth N9.69tn or 72.26 per cent, Nigerian Treasury Bills worth N2.65tn or 19.77 per cent and FRN Treasury Bonds of N125.99bn or 0.94 per cent.

Others included FGN promissory notes of N707.76bn or 5.28 per cent, FGN Sukuk worth N200bn or 1.49 per cent, FGN green bonds worth N25.69bn or 0.19 per cent and FGN savings bonds of N10.43bn or 0.08 per cent.

In spite of higher debt stock, the cost of debt servicing declined by 15.00 per cent to N800.73bn at end-June 2019, compared to N941.99bn in the corresponding period of 2018.

This was due to declining yields in the fixed income market during the review period according to the report.

The CBN stated that the FGN domestic debt service was N800.73bn at the end of June 2019, representing a decrease of 15.00 per cent when compared to N941.99bn at end-June 2018.

The decrease was attributed to the fall in yields on the securities issued in the markets.

A breakdown of the cost showed that interest expense on NTBs stood at N166.63bn or 20.81 per cent, coupon payments on FGN bonds, FGN savings bonds and FGN green bonds accounted for N609.84bn or 76.16 per cent, N0.66bn or 0.08 per cent and N0.72bn or 0.09 per cent respectively.

A rental payment on FGN Sukuk was N16.02bn or 2.00 per cent, while interest paid on FRN treasury bonds was N6.87bn or 0.86 per cent.