Thus, the Federal Government's debt profile rose from N4.18tn as of June 30, 2010 to N6.75tn as of June 30, 2012.
Jonathan was sworn in as Nigeria's Acting President on February 10, 2010 following the death of President Umaru Yar'Adua and was later sworn in as the elected president on May 29, 2011.
Records obtained from the Debt Management Office showed that four months after Jonathan became Acting President, the total debt profile stood at N4.18tn (as at June 30, 2010).
However, by June 30, 2012; the debt profile had ballooned to N6.75tn.
This shows that within a period of 24 months or two years, the Federal Government debt profile rose by 61.48 per cent.
Analysis of the debt increment between June 30, 2010 and June 30, 2012 shows that the Federal Government borrowed an average of N107.08bn every month for 24 months or a total of N1.285tn per annum.
If the increment in debt profile is subjected to daily analysis, the Federal Government borrowed N3.52bn every day for a period of two years.
This debt profile is exclusive of the nation's total debt portfolio as it is more difficult to determine the total indebtedness of the subnational government – the state and local governments.
While the DMO put the external indebtedness of the 36 states of the federation and the Federal Capital Territory at $2.21bn (N344.96bn) as at June 30, 2012; their domestic debt profile could not be obtained as the data are being determined by the debt office.
As at June 2012, the states' external debt profile constituted 36.7 per cent of the nation's foreign indebtedness while the Federal Government accounted for 63.3 per cent of the external debt portfolio.
Although DMO has worked out the domestic indebtedness of the Federal Government as at September 30, 2012 as N6.34tn, the external debt profile of the date had not yet been determined.
The combined external debt of both the states and the Federal Government, which stood at N7.33tn in September, has not yet been split between the two tiers of government.
Analysing the local debt component by instrument showed that as at June 30, 2010, Federal Government of Nigeria Bonds known for short as FGN Bonds accounted for 63. 97 per cent (or N2.41tn) of the domestic debt component.
Nigeria Treasury Bills accounted for N901.02bn or 23.93 per cent while Treasury Bills accounted for N392.07bn or 10.41 per cent. Development Stocks, on the other hand, accounted for N220m or 0.01 per cent while Promissory Notes accounted for N63.03bn or 1.67 per cent.
For June 2012, FGN Bonds accounted for N3.71tn or 60.37 per cent; Nigerian Treasury Bills N2.08tn or 33.88 per cent; and Treasury Bonds N353.73bn or 5.75 per cent.
While the external debt profile increased by 18.03 per cent within the two year period, the domestic component increased by 63.48 per cent.
This clearly shows the trend in the past seven years. The government had shown a preference for borrowing from the domestic market.
Most of the domestic debts had not been tied to any specific project but had been raised to finance budget deficits.
Economist and Head of Research and Strategy at BGL Securities Limited, Mr. Olufemi Ademola, had attributed the increase in domestic debts to shortfall in revenue and the controversial oil subsidy expenditure.
What the Federal Government had done over the past few years was to show foreign debts the exit door and open the doors too large for domestic debts. That, however, may have been put on the reverse gear with recent developments.
Request for fresh loan
Coordinating Minister of the Economy and Minister of Finance, Dr. Ngozi Okonjo Iweala, had not hidden her preference for foreign borrowing as she had insisted that the Federal Government was crowding the private sector from the local debt market.
This means that with the Federal Government active in the local debt market, lenders would always prefer to lend to the government to the detriment of the private sector operators that also need money to develop their businesses.
Although Okonjo-Iweala championed the nation's exit from foreign debt crisis between 2004 and 2006, since she resumed in government as the Coordinating Minister of the Economy, the Federal Government has become more active in the foreign debt market.
The Federal Government had recently presented to the National Assembly a plan to borrow $8bn from external sources for infrastructure development. The plan met some opposition from some members of the National Assembly.
Should it go ahead with the $8bn loan, the move will balloon the Federal Government's foreign debt to $13.91bn.
While presenting the 2012 budget proposal to the National Assembly, President Goodluck Jonathan had lamented that the domestic debt has been growing at an alarming rate in recent years.
The clearest evidence of this is that in 2012, the Federal Government earmarked N560bn for debt servicing.
The president spoke of curtailing domestic debt but he also gave room for the government to accumulate more debt by saying that the debts should not go beyond 30 per cent of Gross Domestic Debt.
At the moment, the debt to GDP ratio is slightly less than 20 per cent. With a latitude of 30 per cent debt to GDP ratio, the government can add up to 50 per cent of the current debt level.
Nonetheless, the Federal Government still plans to borrow N633.85bn from the domestic debt market in 2013.
The amount proposed for servicing total domestic debt would increase to N543.38bn, reflecting the increment expected in the volume of domestic debt in 2013.
Effect of huge borrowing
In a telephone interview, President of the Campaign for Democracy, Dr. Joe Okei-Odumakin, had said the increasing indebtedness was a sign that the nation's resources were being mismanaged and portend a great danger to the economy.
She said, "Increasingly, we cannot meet all our obligations. As we are speaking, some agencies have not received their allocations. The increasing debt is going to have a skyrocketing effect on the economy; repaying of the loans.
"We are busy collecting loans that we don't need and loans that are not properly utilised. It boils down to corruption. There is a cause to worry.
"It is not just that we are borrowing money but the money is not being well utilised. If our founding fathers borrowed this way, we would have gone into extinction by now."
She cautioned against frivolous borrowing, adding that borrowed funds should be properly utilised.
Ademola, on the other hand, said unbudgeted expenditure for the funding of petrol subsidy consumed in 2011 by the country must have depleted the nation's resources and thereby forced the Federal Government to the debt market.
He had said, "You are aware that the subsidy on petrol rose from less than N500bn in the budget to more than N2tn. The finance minister has also come out to say that the nation lost 20 per cent revenue to oil theft.
"Giving these losses in revenues, what the Federal Government had to do was to resort to the local debt market. Statistically, we are still okay. That is when you look at the debt to Gross Domestic Product ratio.
"However, generically; this is not good. It means that national debt servicing will continue to grow. The government will continue to pay higher for debt servicing. This will reduce the money available to be spent on other things.
"It also means that the interest rate will continue to grow. The average businessman will not be able to borrow at a good rate."
Overall, he added, increasing interest rate would affect the profit that businessmen can make in the country.
The Chief Executive Officer, Fatrax Securities Company Limited, Dr. Wale Ositelu, said the level of debt was crowding out the real sector of the economy.
He said, "There's a case to be made against the public sector's growing borrowing requirement. As the Federal Government has borrowed more, it has seen an increase in the yield on its borrowing instruments. These increases in rates have increased the attraction of government debt instruments. However, it has pushed the private sector out of the business of issuing bonds, and diverted domestic savings away from the capital market to the money market."
Ositelu said that it had become trendy for government to see nothing wrong with its borrowing pattern on the excuse that it was still within the globally acceptable limit of 40 per cent of the GDP.
The Managing Director, Sotice Investment Company Limited, Mr. Adedayo Toluwase, said increasing debt profile was contributing next to nothing to the economy.
He said, "The concern with rising debt profile is not really with the rising figures only, a major problem is that the loans are taken and not always used for capital projects or productive sectors of the economy. Nigerians will not have cared so much about the debt profile if government has shown in concrete terms, what it has achieved with previous loans obtained from both local and external creditors."
Ositelu added, "The economy stands serious risk if the government continues like this. One of the implications of the present debt profile is that Nigeria may be sliding back to the years of debt overhang few years after it exited from the London and Paris clubs of creditors."
National Assembly complains
Penultimate Wednesday, members of the House of Representatives committee on debts, aids and loans questioned Bauchi State Governor, Isa Yuguda and representatives from other states over their foreign loan bids.
Yuguda is currently seeking a total of $171m foreign loan for the state out of the total package of $9.3bn which the Federal Government has proposed in the 2012-2014 Borrowing Plan.
His Kaduna State counterpart is seeking $234m loan to fund projects which include the Bi-Lingual Education Programme and the Urban Water Sector Reform Project. This is in addition to the state's current debt stock of $182m.
Also featuring prominently in the league of foreign loan-seeking states are Lagos, Edo, Kaduna, Ondo, Yobe, Ogun, Cross River, Adamawa, Kwara, Niger, Enugu and Oyo. Credits sought by the state governments are part of the total loans captured in the 2012-2014 External Borrowing Plan of the Federal Government.
And like the governors, President Goodluck Jonathan has lately been bombarding the National Assembly with requests for approvals to secure loan facilities from different parts of the world. Recent requests include approval of the Senate for Nigeria to take a $1.6bn loan to finance a water supply project in Rivers State and for the execution of housing projects across the country. The loan, he said, would be financed by the African Development Bank.
The request is seeking the inclusion of $200m to finance a water supply project for Rivers State and another $300m for a low-income housing scheme, which will be financed by the World Bank to provide affordable housing for Nigerians.