Nigeria’s whole public debt rose by 5.97 per cent, or N8.02 trillion, to N142.3 trillion as of September 30, 2024, the Debt Administration Workplace (DMO) has mentioned.
Nigeria has been battling a rising debt profile, for which specialists have expressed concern that the debt might not be sustainable.
The DMO mentioned the rise was pushed by naira depreciation in addition to heavy home borrowing by the federal authorities. The trade fee weakened from N1,470.19/$ in June to N1,601.03/$ by the tip of September.
In keeping with the DMO, the federal authorities accounted for the majority of home debt, which rose from N66.96 trillion in June to N69.22 trillion by September, whereas the portion owed by states and the Federal Capital Territory (FCT) declined barely in the course of the interval, from N4.27 trillion to N4.21 trillion.
Previous to the interval underneath assessment, Nigeria’s whole public debt was N134.3 trillion as of June 2024.
Information from the DMO confirmed that Nigeria’s exterior debt in greenback phrases grew marginally by 0.29 per cent, from $42.90 billion in June to $43.03 billion in September. Nevertheless, the naira equal of exterior debt surged considerably by 9.22 per cent, rising from N63.07 trillion to N68.89 trillion throughout the identical interval.
Home debt recorded combined efficiency, declining by 5.34 per cent in greenback phrases, from $48.45 billion in June to $45.87 billion in September. In naira phrases, nevertheless, home debt elevated by 3.10 per cent, from N71.22 trillion to N73.43 trillion.
It was noticed that Federal Authorities bonds remained the biggest element of home debt, growing by 4.47 per cent to N54.65 trillion in September, up from N52.32 trillion in June. This represents 78.95 per cent of the overall home debt inventory, a rise from 78.13 per cent within the earlier quarter. The issuance of bonds in naira phrases accounted for almost all of this progress.
It was additionally famous that Nigeria’s first home dollar-denominated bond added N1.47 trillion to the debt inventory.
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The report additionally reveals that the second-largest home debt element, Treasury Payments, declined marginally by 0.66 per cent to N11.73 trillion, from N11.81 trillion within the earlier quarter. This discount aligns with efforts to average short-term debt and mitigate rollover dangers.
Promissory notes, used to settle authorities obligations, grew by 5.80 per cent, growing from N1.67 trillion in June to N1.77 trillion in September.
Whereas the Federal Authorities Sukuk, an infrastructure funding instrument, declined by 9.14 per cent to N992.56 billion, down from N1.09 trillion.
The DMO additionally experiences that financial savings bonds elevated by 16.11 per cent to N64.09 billion, reflecting rising retail investor participation. Nevertheless, it mentioned inexperienced bonds remained unchanged at N15 billion, sustaining their minimal contribution of 0.02 per cent to the home debt inventory.
Evaluation of Nigeria’s exterior debt inventory of $43.03 billion in September 2024 revealed a largely steady profile, with solely minor changes in multilateral and bilateral obligations.
Multilateral obligations elevated by 0.67 per cent to $21.77 billion, sustaining their dominance at 50.60 per cent of the overall exterior debt. The rise was pushed by extra disbursements from establishments just like the World Financial institution, which added $513.06 million to its Worldwide Growth Affiliation portfolio, now at $16.84 billion.
Bilateral debt decreased barely by 1.33 per cent, falling from $5.89 billion to $5.81 billion.
The report additionally reveals that loans from China, Nigeria’s largest bilateral lender, declined by $99.98 million, whereas obligations to France and Germany remained steady.
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Within the space of business loans, primarily Eurobonds, had been unchanged at $15.12 billion, representing 35.14 per cent of whole exterior debt. Nigeria raised $2.2 billion by means of its Eurobond public sale in December 2024, marking Nigeria’s return to the worldwide capital markets. The funds had been raised by means of two bonds: a 6.5-year $700 million bond at 9.625 per cent and a 10-year $1.5 billion bond at 10.375 per cent. Whereas whole subscriptions exceeded $9 billion, solely $2.2 billion was allotted. These funds are anticipated to assist the 2024 finances amid income shortfalls and mounting public spending pressures.
Consultants have raised the alarm over the nation’s rising debt, which they are saying might create macroeconomic challenges, particularly if the debt service burden continues to develop.
The 2025 finances proposal of N49.7 trillion has a provision for a N13.4 trillion deficit, a determine that has drawn criticism from economists who concern this can add to the nation’s debt inventory.
Professor Uche Uwaleke, a Professor of Capital Markets and Director of the Institute of Capital Market Research on the Nasarawa State College Keffi, expressed concern over the financing of the N13.4 trillion deficit, wherein asset sale/privatization proceeds will contribute a mere N312 billion, whereas N3.8 trillion represents multilateral/bilateral project-tied loans.
He mentioned the majority of the borrowings, about N9.3 trillion, can be largely discretionary and non-project-tied.
“So as to not compound the already large debt burden the nation is going through, each effort ought to be made to make sure that all long-term funds sourced from the debt capital market are tied to self-liquidating initiatives,” he mentioned.
