According to the Debt Management Office (DMO), Nigeria’s overall debt stock increased significantly in the first quarter of 2023. A 24.33 trillion increase in its total public debt in just three months was recorded, going from N97.34 trillion at the end of December 2023 to an astounding N121.67 trillion by March 2023.
In a comprehensive statement, the DMO stated that all 36 states, the federal government, and the Federal Capital Territory (FCT) are included in this large increase in debt. According to the breakdown, the amount of debt incurred domestically increased to N65.65 trillion ($46.29 billion), and the amount owed abroad increased to N56.02 trillion ($42.12 billion).
The DMO highlighted that the increase in domestic debt—from N59.12 trillion at the end of December 2023 to N65.65 trillion by the end of March 2023—was primarily due to new borrowings aimed at partly financing the 2024 federal budget deficit. Additionally, the securitization of a portion of the N7.3 trillion Ways and Means Advances at the Central Bank of Nigeria contributed to this increase.
The DMO’s report also notes that while borrowing will continue as stipulated in the 2024 Appropriation Act, there is an expectation of improvements in government revenue which are anticipated to enhance debt sustainability.
Further details provided by the DMO illustrate a significant reshaping of Nigeria’s domestic debt profile. Specifically, the FGN bonds increased by N4.16 trillion, reaching N48.42 trillion. Treasury bills saw a rise of N3.92 trillion, totaling N10.44 trillion. The FGN savings bonds grew modestly by N4.69 billion, culminating in N43.88 billion, and promissory notes escalated by N240.22 billion, amounting to N1.57 trillion.
In terms of external debt, while the dollar value of Nigeria’s foreign loans decreased to $42.12 billion from $42.49 billion, the naira equivalent of these loans witnessed a dramatic increase. This was mainly due to fluctuations in the exchange rate, with the naira equivalent of the external debt jumping to N56.03 trillion (at N1,330.26/$ as of March 2024) from N38.22 trillion (at N899.39/$ as of December 2023).
Despite the rise in total debt expressed in naira, the overall dollar value of Nigeria’s debt actually decreased, falling by $16.77 billion to $91.46 billion from $108.23 billion. This decrease is reflective of broader global economic dynamics and local currency fluctuations.
In alignment with the 2024 budget, which foresees a deficit of N9.18 trillion, the Federal Government plans to cover this shortfall partially through N7.83 trillion in new borrowings. In a recent update, Patience Oniha, the director-general of the DMO, disclosed that the government has successfully raised N4.5 trillion of its N6 trillion target for the 2024 budget cycle.
