Nigeria seen moving to reschedule debt, secure IMF support
With the Nigerian economy grappling with “excruciating debt service”, the country will make moves to reschedule its external debt and secure policy support from the International Monetary Fund, analysts at Financial Derivatives Company said.
The analysts, led by economic expert Bismarck Rewane, said the country’s gross external reserves remain a subject of controversy, with its published data showing a position of $33.23 billion on a 30-day moving average basis.
The backlog of unsettled forward contracts is estimated at $6.8 billion and airlines’ trapped funds are about $800 million, they said in a note published on Friday.
“We are confident that Nigeria will approach the markets to reschedule its inefficiently structured external debt and talk to the IMF about policy support after the World Bank meetings in Morocco,” the analysts said.
Africa’s biggest economy saw its total public debt jump to N87.38 trillion in the second quarter of this year from N49.85 trillion at the end of March following the securitisation of the N22.7 trillion owed to the central bank. Its external debt rose to $43.16 billion from $42.67 billion.
“Some may ask why borrow more money when you are up to your ears in debt. The answer is simply that mismanaged debts and liabilities with no tangible assets to show need to be followed by project-specific borrowing and proper governance going forward,” the FDC said.
