Your Nigerian Economist

Your Nigerian Economist

Inclusive growth lies at the heart of Nigeria's development. From macroeconomic policies to energy resources; trade to development topics, Your Nigerian Economist engages the citizenry in discussing relevant economic issues and proffers solutions towards a fairer, more developed economy.

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Why All the Borrowing?

Mma Amara Ekeruche

Mma Amara Ekeruche

Amara works as a Research Associate at the Centre for the Study of the Economies of Africa (CSEA). She holds a BA (first class) in Economics from Kwame Nkrumah University of Science and Technology, Ghana and an MSc in Economic Policy from University College London.

The 2014 oil price crash decimated Nigeria’s revenue stream. In 2012, revenues totaled ₦10.1 trillion, with ₦8.1 trillion coming from oil; by the end of 2016, it had fallen to ₦5.1 trillion, with oil revenues amounting to just ₦2.7 trillion. Amid this, the government has turned to borrowing to finance its expenditure as it tries to stimulate the economy.       

Nigeria’s debt has jumped from ₦12.6 trillion in 2015 to at least ₦20.4 trillion in 2017. Some of this was due to the depreciation of the naira which inflated our foreign debt, but most of it is as a result of aggressive borrowing under this administration.

There was the $1.5 billion Eurobond used to fund the capital expenditure of the 2016 budget, then a $300 million Diaspora bond, and then another $3 billion Eurobond for restructuring the debt portfolio and funding the capital expenditure of the 2017 budget. The government has even sold relatively unique forms of debt – issuing a ₦100 billion Sukuk in September 2017 and a ₦11 billion Green bond for environmentally friendly projects. And all these do not account for the increase in domestic borrowing through the usual FGN bond and Treasury bill sales.

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