The Federal Government spent $25.82bn to service its debts between 2012 and 2016, the Debt Management Office has said.

If converted to naira using the official rate of N305 to one dollar as of December 31, 2016, DMO said this amounted to N7.88tn.

The DMO, which stated this in its 2016 Annual Report and Statement of Accounts, also said that the Debt Sustainability Analysis of the country’s debt showed that the situation had deteriorated.

According to the office, the amount used to service the Federal Government’s debt declined from $5.49bn in 2015 to $4.38bn in 2016.

The decline was, however, in nominal terms when converted to dollar following adjustment in the nation’s foreign exchange variation. The official exchange rate was higher in 2015. However, much of the Federal Government’s debts are denominated in naira and interest rates are paid in naira.

Further statistics provided by the DMO showed that $4.92bn was spent on debt servicing by the Federal Government in 2012; $5.52bn in 2013; and $5.5bn in 2014.

The DMO analysis of the country’s debt portfolio showed that for the first time since the country’s exit from the Paris Club debt overhang in 2005, Nigeria’s debt had slipped from low risk to medium risk distress.

It said that the debt portfolio had become vulnerable to shocks associated with revenue, exports and substantial currency devaluation.

The report stated, “The result of the DSA showed that for the first time since the exit from the Paris and London clubs of creditors in 2005 and 2006, respectively, Nigeria’s debt position experienced some deterioration and slipped from low-risk of debt distress to a medium-risk of debt distress.

“Although the level of debt stock is still appreciably low relative to the country’s aggregate output, the debt portfolio remains mostly vulnerable to the various shocks associated with revenue, exports and substantial currency devaluation.

“While the Gross Domestic Product-related indicators appeared normal, as they remained below their respective thresholds, the revenue-based indicators were mostly sensitive to the revenue shocks; thus, underscoring the urgent need for concerted efforts to diversify the revenue base of the country away from oil.”