Nigeria’s Debt Management Office has said the N850bn domestic loan approved by the Senate on Tuesday is not fresh as reported, but a conversion of external source to domestic source.
The borrowing is an amendment of the source of borrowing from the external capital market to domestic capital market. It became necessary to review the loan source owing to the impact of the coronavirus disease on the global economy and the difficulty, as international capital markets are not breathing easy, either.
The Director-General of the DMO, Patience Oniha, said it was neither a new loan nor an increment, describing it rather as “an amendment of the source of borrowing from external to domestic.”
She said, “This conversion from external to domestic borrowing is to ensure that the implementation of the 2020 Appropriation Act is not jeopardised by lack of funds.
“Thus, the N850bn is not new or incremental borrowing, rather it is an amendment of the source of borrowing from external source to domestic sources.”
Oniha added that President Muhammadu Buhari’s decision to seek fresh approval from the Senate and House of Representatives for the conversion of sources from external to domestic was to comply with relevant laws.
With concerns over the profile of Nigeria’s rising debt of which available data as at September 2019 put total domestic debt at N18tr, which is a 68.45 per cent, there is no decline in sight.