Nigeria’s Public Debt Rises by N24.33 Trillion in Three Months

The Debt Management Office (DMO) of Nigeria has reported a significant increase in the nation’s total public debt, which reached N121.67 trillion (approximately $91.46 billion) as of March 31, 2024. This figure includes the combined domestic and external debts of the Federal Government of Nigeria (FGN), the thirty-six state governments, and the Federal Capital Territory (FCT).

Comparison with Previous Quarter

As of December 31, 2023, Nigeria’s total public debt stood at N97.34 trillion (approximately $108.23 billion). The rise to N121.67 trillion represents a substantial increase of N24.33 trillion or 24.99% over a three-month period.

Impact of Naira Devaluation

The increase in debt is driven significantly by naira devaluation. Despite the nominal increase in naira terms, the total debt in dollar terms actually reduced by $16.77 billion or 18.34%.

Domestic vs. External Debt

As of March 31, 2024, the breakdown of Nigeria’s total debt is as follows:

• Domestic Debt: N65.65 trillion (approximately $46.29 billion), accounting for 53.96% of the total debt.
• External Debt: N56.02 trillion (approximately $42.12 billion).

Growth in Domestic Debt

Excluding the impact of naira exchange rate movements, the domestic debt component increased from N59.12 trillion at the end of December 2023 to N65.65 trillion by March 31, 2024. This rise of N6.53 trillion or 11.05% is attributed to:

• New borrowing to partially finance the 2024 Budget deficit.
• Securitization of a portion of the N7.3 trillion Ways and Means Advances at the Central Bank of Nigeria (CBN).

Official Statement

The DMO’s statement read: “Nigeria’s Total Public Debt, comprising the Total Domestic and External Debts of the Federal Government of Nigeria (FGN), the thirty-six (36) state governments, and the Federal Capital Territory (FCT), stood at N121.67 trillion (USD91.46 billion) as of March 31, 2024. The comparative figure for December 31, 2023, was N97.34 trillion (USD108.23 billion). Total Domestic Debt was N65.65 trillion (USD46.29 billion) while Total External Debt was N56.02 trillion (USD42.12 billion). Excluding Naira exchange rate movements in Q1 2024, only the Domestic Debt component of Total Public Debt grew from N59.12 trillion on December 31, 2023, to N65.65 trillion on March 31, 2024. The increase was from new borrowing to part-finance the 2024 Budget deficit and securitization of a portion of the N7.3 trillion Ways and Means Advances at the Central Bank of Nigeria.”

Government Financing Efforts

The DMO’s Director General, Patience Oniha, stated that the federal government has raised N4.5 trillion out of the N6 trillion target in the 2024 budget. Domestic securities remain a major source of federal government spending.

This substantial rise in debt underscores the economic challenges facing Nigeria, including the impact of currency devaluation and the need for new borrowing to finance budget deficits. The government’s focus on raising funds through domestic securities highlights its strategy to manage these financial pressures while seeking to sustain economic stability.