Both the Federal Government and state governments have been ramping on up foreign debts in recent times in a bid to cut down on domestic debt servicing.
Although interests on foreign loans are considered low compared to local loans, the increase in foreign debt commitment has also resulted in increasing foreign debt commitment.
Statistics showed that the country paid $293,003,540 for external debt services in 2012. In 2013, the payment amounted to $297,329,300.
In 2014, a total of $346,723,290 was paid to service external debt.
It came down slightly in 2015 when $331,059,850 was spent and moved up a bit with the payment of $353,093,540 in 2016.
In 2017, the country paid $464.05m in external debt servicing while in 2018, a total of $1.47bn was paid.
The rise in the domestic debt profile of the country has caused increasing concern within and outside government circles because of the high interest rate payable especially on domestic loans.
The International Monetary Fund, for instance, had recently said that the government was spending more than 50 per cent of its resources on debt servicing.
The African Development Bank also raised a similar concern in its 2019 Economic Outlook for West Africa.
However, the Federal Government insists that the country does not have a debt problem but a revenue challenge.
To tackle the challenge, the government has put up a number of measures aimed at increasing the nation’s revenue profile.
Some of the measures include the bill to increase the Value Added Tax from five per cent to 7.5 per cent which was passed by the country’s Senate on Thursday.
