Home » Latest Politics » Nigeria’s External Debt Put at $4.78b

Nigeria’s External Debt Put at $4.78b

As agitations continue to trail the federal government’s penchant for borrowing, after the exit from the London and Paris clubs’ debts, Debt Management Office (DMO) yesterday put the external debt portfolio of Nigeria at $4.78 billion as at December 2010.

In an interactive session with the Finance Correspondents Association of Nigeria (FICAN) in Abuja, the Director General of DMO, Dr Abraham Nwankwo said that the multilateral debts(mostly soft loans) constitute the bulk (92.45%) of the external debt stock.

Addressing fears being expressed by some Nigerians on the borrowings, he said that to borrow is a necessity of a thriving economy, adding that a nation stops borrowing when its economy stops functioning. He cited big economies like China, United Kingdom and United States of America, as the economies that are heavily dependent on borrowing.

The DG further stated that having fully repaid the Paris Club debt and bought back the London club debt, the country’s external debt  has drastically reduced from over $35 billion or 41.68 per cent of Gross Domestic Products (GDP) in 2004 to $3.55 billion or 3.7 per cent in 2006.

“Following the significant reduction in the external debt, the policy thrust external borrowing was mainly limited to concessional  windows, while  the debt management strategy shifted and focused on borrowing from the domestic sources” he said.

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