The Debt Management Office says Nigeria’s total debt stock stood at N20.37 trillion as at September 30 this year.

This represents a 3.6 percent increase from the N19.64 trillion debt profile as at June 30.

According to a statement made available to journalists in Abuja on Tuesday, the DMO said domestic debt accounted for 76.96 percent, while external debt made up the remaining 23.04 percent.

Specifically, the domestic debt stock stood at N15.68 trillion, an increase of 4.1 per cent when compared to N15.03 trillion as at June 30.

External debt, on the other hand, rose by 1.9 percent to N4.69 trillion, from the N4.6 trillion under the same period.

According to DMO, the data shows that the federal government was right when it said that the country’s huge domestic debt was partly responsible for the high cost of debt servicing.

This is why the DMO supports President Muhammadu Buhari’s recent move to secure a fresh $5.5 billion external debt.

The amount which comprises of $2.5 billion in new borrowing to partly finance the N2.32 trillion deficit in the 2017 Appropriation Act and $3 billion to repay maturing domestic debt is expected to achieve a reduction in interest costs of about N75 billion and N91 billion respectively when compared to the interest cost of borrowing in Naira in the domestic market.

It will also contribute to attaining FG’s target ratio of 60:40 between domestic and external debt, the DMO said.

The DMO further explained that increased external borrowing will result in more availability of funds to the private sector and lower domestic lending rates.

These will enable the private sector contribute to growth and lead to higher level of external reserves to support the Naira exchange rate.