Nigeria’s overall debt profile to increase in 2016

…N1.47trn for debt servicing next year

By Odunewu Segun

The proposal by the federal government to borrow N1.84trn to finance the N2.22trn budget deficit of 2016 is going to increase Nigeria’s overall debt profile to 14 per cent of the GDP.

In the fiscal document, a copy of which was obtained from the website of the Budget Office of the Federation, the sum of N1.30tn was planned to be spent on servicing the domestic component of the nation’s debt, while the sum of N53.48bn was proposed for foreign debts.

In addition, N113.44bn was proposed to be set aside for a sinking fund that would enable the government to retire maturing loan obligations.

The 2016 budget has a fiscal deficit of N2.22tn, representing 2.16 per cent of Nigeria’s Gross Domestic Product.

The deficit, according to the President, will be financed from new borrowings of N1.84tn made up of domestic borrowing of N984bn and foreign borrowing of N900bn.