Figures from the Debt Management Office show a remarkably high percentage change in debt servicing for the first quarter, 2018. Specifically, the Federal Government paid N643 billion for domestic debt servicing1, a quarter-over-quarter and year-on-year increases of 50 percent (from N429.8 billion) and (from N424 billion) respectively. Increasing debt burdens and debt servicing seem to be exacerbated by the high cost of domestic debt, necessitated by huge domestic borrowings to fund budgets and reflate the economy
Macroeconomic Report & Economic Updates
August 2, 2018
Nigeria Economic Update (Issue 26)
Figures from the Debt Management Office show a remarkably high percentage change in debt servicing for the first quarter, 2018. Specifically, the Federal Government paid N643 billion for domestic debt servicing1, a quarter-over-quarter and year-on-year increases of 50 percent (from N429.8 billion) and (from N424 billion) respectively. Increasing debt burdens and debt servicing seem to […]
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Nigeria Economic Update (Issue 5)
The Naira continued to depreciate in the
review week. At the parallel market, naira exchanged for N498/$ on January 27,
2017 and N500/$ on February 3, 2017. Despite the weekly sales of forex to BDCs and
the significant improvements in the external reserves, the naira has continued
to lose value to other currencies. The pressure on the naira has been triggered
by escalating scarcity of forex in the spot market, likely due to
forex hoarding. However, in the preceding week, the CBN sold $660 million in forwards
contract in an attempt to manage liquidity and stabilize the naira.
In the face of growing speculation in the parallel market, the monetary
authority should institute mechanisms that would discourage excessive forex
hoarding among licensed BDC operators. An initiative that monitors transaction
dealings in the parallel market would go a long way in detecting erring BDC
operators.
External Reserve
External Reserve: External reserve picked up from its year-2000 level below $10,000 million to above $60,000 million in 2008. However, the external reserve fell deeply in 2010/11 and even further in 2