Nigeria’s Debt Climbs To N36 Trillion

Nigeria’s public debt, which includes domestic and external commitments of the Federal Government, 36 state governments, and the Federal Capital Territory (FCT), has climbed to N35.465 trillion as of June 30, according to the Debt Management Office (DMO).

Ms. Patience Oniha, Director-General of the Debt Management Office, made the announcement during a public debt presentation on Wednesday evening.

Nigeria’s total public debt stock, according to her, was N33.107 trillion ($87.239 billion) as of March 31, 2021, but had risen to N35.465 trillion by the end of June.

From the end of the first quarter to the end of the second quarter, the total debt stock increased by N2.358 trillion.

External debt accounted for N13. 711 trillion, or 38. 66% of total debt, while domestic debt accounted for N21.754 trillion, or 61. 34% of total debt obligations, according to a breakdown of the national debt number for the period under consideration.

The Federal Government was responsible for N11. 828 trillion in external debt and N17. 632 trillion in domestic debt, while States and FCTs were responsible for N1.883 trillion in external debt and N4. 122 trillion in domestic debt.

The majority of the external debt was owed to multilaterals (the World Bank Group and the African Development Bank Group), accounting for 54.88 percent of the total.

Commercial debt (Eurobonds and Diaspora bonds) came in second with 31.88 percent, followed by bilateral debt (China, France, Japan, India, and Germany) at 12.70 percent and promissory notes at 0.54 percent.

“We have initiated actions towards managing that risk,” the DMO chairman said of the foreign exchange implications for debt service, especially given the recent naira depreciation.

Oniha said that trying to source funds offered various advantages for Nigeria, including promoting the country in international financial markets where enormous pools of capital are available.

“Sovereign Eurobonds serve as a benchmark against which several local banks have issued Eurobonds,” she added. Zenith Bank, Access Bank, UBA, FBN, Ecobank Nigeria, and Fidelity Bank are among the banks that have issued Eurobonds so far. Nigerian banks were able to raise Tier 2 capital to meet regulatory criteria through this window provided by the sovereign bond, which increased their capacity to lend to and support local borrowers.

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