The Debt Management Office, DMO, has advised the Federal Government not to borrow above $22.08 billion in 2017.
The DMO gave the recommendation on Tuesday in its 2016 Debt Sustainability Analysis (DSA) report, obtained by the News Agency of Nigeria in Lagos.
In the report, DMO stated that the end-period on Net Present Value (NPV) of the Total Public Debt-to-GDP ratio for 2016 for the Federal Government was projected at 13.5 per cent.
”The maximum amount that can be borrowed (domestic and external) by the Federal Government of Nigeria in 2017, without violating the country-specific threshold, will be 22.08 billion dollars (i.e. 5.89 per cent of 374.95 billion dollars).
”The Debt Management Strategy, 2016-2019 provides for the rebalancing of the debt portfolio from its composition of 84:16 as at the end of December, 2015 to an optimal composition of 60:40 by the end of December, 2019 for domestic to external debts, respectively.
It explained that the development supported the use of more external finance for funding capital projects, noting that the policy was in line with the focus of the present administration on speeding up infrastructure development in the country.
The DMO stated that it would achieve this by substituting the relatively expensive domestic borrowing in favour of cheaper external financing.


”This policy stance has been reinforced by the recent deterioration in macroeconomic variables, particularly with respect to the rising cost of domestic borrowing.

”Hence, the shift of emphasis to external borrowing would help to reduce debt service burden in the short to medium-term and further create more borrowing space for the private sector in the domestic market.
”Accordingly, for the fiscal year 2017, the maximum amount that can be borrowed is 22.08 billion U.S. dollars and it is proposed to be obtained from both the domestic and external sources as follows:
”New Domestic Borrowing 5.52 billion U.S. dollars (equivalent of about N1.6 billion) and New External Borrowing: 16.56 billion U.S dollars (equivalent of about N4.8 billion).”
The DMO also emphasised that the recommendation was made, taking into account the absorptive capacity of the domestic debt market and the options available in the external market.
Nigeria’s total debt portfolio rose 30 per cent to $62 billion in 2014, up from $47.6 billion as at September 2013.
The country’s external debt stood at $9.52 billion, 15 per cent of the entire debt stock.
Domestic borrowing, however, accounted for bulk of the total money owed by Africa’s largest economy.
Prior to the 2005 debt relief, bad debt management practices led to the payment of $4.9 billion yearly on debt servicing.

SamuelAnyawu:
I'm not against Buhari borrowing, I'm only scared that 40% of that money might be used in clearing grasses

kokosin:
if buhari is a good leader he shld sell his cows and put d money in d treasury

mrvitalis:
Borrowing $100bn dollars is not the problem... if they are used for revenue generating projects that can pay off the loan no problem. ..

Government should tell us which project each money is meant for and the feasibility study, tge revenue projections.. That's what the PDP and other partys should demand

CHIJIOKE1314:



Which government are you referring? There is no government here.. Just one silly old mtherfvcka parading with his club of criminals running the event of our time..

Buhari is criminal who has come to steal and kill just like the biblical description of the devil..

He has nothing in his brain and nothing shall he offer..

Imagine the Idďiotic basťarď didn't even bother consulting or at least wait for DMO's advice before going ahead with his barbarian directive..

mrvitalis:

Read about perception n judgement u need to free up

mrvitalis:

Read about perception n judgement u need to free up

CHIJIOKE1314:




My friend,

I just did a quick rundown on ur timeline to discover you are one of those I and other NL 'wailers' would love to tag a zombie but, I am never gonna call u a zombie today, ahh swear!

...but would definitely love to understand why I need to give Buhari more time to continue with this ghost dance..

Please, enlighten me..

SamuelAnyawu:
I'm not against Buhari borrowing, I'm only scared that 40% of that money might be used in clearing grasses