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BudgIT Nigeria has deconstructed statement by the Vice President of Nigeria, Prof. Yemi Osinbajo that the current administration borrowed a total of $10 billion within the past three years.
Reacting to the statement, BudgIT, in a series of tweets on its Twitter handle, stated that the current administration has borrowed a total of $22 billion.
It added, however, that the debt includes EXTERNAL and DOMESTIC debts by state governments but approved by the President Muhammadu Buhari-led federal government.
It states further that “DOMESTIC debt of FG as at June 2015 was N8.39tn while it stood at N12.15tn as at June 2018. That’s another increase of N3.76tn in 3 years.
“At an exchange rate of N305/$, that’s $12bn. This means the total increase in EXTERNAL and DOMESTIC debt is $22bn.
See the full BudgIT report:
“We are getting queries on the statement by the Vice President that public debt stock rose by $10bn. Due to our recent work on expanding public debt, we will like to clarify.
“The current rise of $10bn in public debt stock does NOT tell the full story. It can be MISLEADING.
“We have seen arguments explaining that the entire Federation borrowed only N3tn in three years since the debt stock rose by $10bn.
“It is important to deconstruct the FG debt into EXTERNAL and DOMESTIC debt to get a full understanding for purposes of accountability.
“Please note that FG Debt Stock = External Debt + Domestic Debt.
“DMO figures showed that FG EXTERNAL debt alone grew from $7.34bn in June 2015 to $17.83bn in June 2018, that’s an additional $10.49bn in 3 years.
“This is FG EXTERNAL DEBT ONLY. Let’s consider FG domestic debt.
“DOMESTIC debt of FG as at June 2015 was N8.39tn while it stood at N12.15tn as at June 2018. That’s another increase of N3.76tn in 3 years.
“At an exchange rate of N305/$, that’s $12bn. This means the total increase in EXTERNAL and DOMESTIC debt is $22bn.
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“It is a public knowledge that the Naira was DEVALUED in recent years, and this act shrunk and expanded a lot of indexes.
“Those who put forward $10bn are comparing the wrong values without adding the important information that exchange rates for the times are different.”
NOTE: The Exchange rate changed.
NOTE: The Exchange rate of $ to 305.70 was used in converting the DOMESTIC debts to USD.
“In our observation, this administration (FG alone) borrowed $22bn in three years but due to naira devaluation GAINS, total public debt stock (for the entire Federation) increased by $10bn, which makes current claims TRUE.
“We advise citizens to analyze data by properly checking public websites. However, it is true that public debt is now $63bn, grew by $10bn, because FG domestic debt in USD terms was $42.63bn in June 2015 and $39.75bn as at June 2018.
“This does not mean that FG borrowed less DOMESTIC debt in 3 years. As we have shown above, the domestic debt of FGN grew from N8.39tn to N12.15tn from 2015 to 2018 respectively…
“DEVALUING exchange rate from N196.95/$ to N305.7/$ made the domestic debt in 2018 relatively SMALLER in USD terms,” the report concluded.
See debt profile according to Debt Management Office [DMO] for 2015 and 2018:
