Nigeria’s Debts now N10.43trn with Few Visible Projects 

Nigeria may not have cross the dangerous threshold where percentage of debt to Gross Domestic Product (GDP) is forbidden, but with a new high of N10.43 trillion or $66.99 billion debt profile as at the end of March 2014, market watchers have expressed concerns that the monies may not have been properly applied.  
The domestic debts are in the firm of monies borrowed by the Federal and state governments through bonds, treasury bills and a former Nigerian treasury bonds.
The other kind of debt which the Federal Government had restrained itself from is the external debt which stood at $9.38 billion or N1.46 trillion during the same period.
This amount represent a growth of 40.74 per cent for domestic debts which stood at $47.6 billion as at March 2013.
The country’s external debt has however reduced from $6.67 billion during the same period in the previous year.
The fear of the market watches is rekindled by the fact that future senior citizens have the contribution sunk in both the Federal State bonds.
Semiu Ojo, a retired banker told National Daily that, so far Nigeria’s debt level is still very low. His only concern is that when people borrow and the monies are used for viable projects, it becomes a boost to the individual or economies as the case may be.
He expressed fears that some state governments will issue bonds only when elections are close, which by the end of the day, the state will simply continue to pay debts that re not well utilized.
For now, the Nigeria pension fund industry is the single largest institutional investor. The pension fund under management now stand at $26 billion or N4.2 trillion.
Currently, pension funds have 64 per cent of their asset invested in FGN bonds and two per cent in corporate debts. The challenge of rating has stricter pension funds from investing heavily in corporate bonds.
Curiously, the size of the pension fund industry is now approaching half the total asset of the banking sector, but only 5.5 million Nigerians are currently paying into pension funds out of a total population of over 160 million people.
Dipe Ojuolape said, if monies borrowed by the governments we used for genuine projects, there will be more jobs and productivity level in the country will be much higher.

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