Neco 2025 Economics Question 12
Practice objective / multiple choice question 12 from the 2025 Neco Economics examination.
A country has existing public debt of \(\text{₦}2.5\) trillion carrying an average interest rate of \(8\%\) per annum. The government intends to issue new bonds worth \(\text{₦}300\) billion, with a coupon rate of \(6\%\) and equal principal repayments over 10 years. It also expects a primary surplus of \(\text{₦}150\) billion each year for the next ten years. Assuming GDP is currently \(\text{₦}12\) trillion and will grow at \(5\%\) per annum, will the debt‑to‑GDP ratio be higher after five years compared with the initial ratio? Show your calculations.
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About This Question
This is Neco 2025 Economics Question 12. It is one of the objective questions from the 2025 Neco Economics examination.
Difficulty level: Medium .
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