November 12, 2024/CSL Research
According to recent data from Nigeria’s Debt Management Office (DMO), the country’s total public debt in Naira terms reached N134.30 trillion (US$91.35 billion) at the end of Q2 2024. This reflects a 10.35% increase from N121.67 trillion (US$91.46 billion) in Q1 2024 and a significant 53.69% rise from N87.37 trillion (US$113.42 billion) in Q2 2023. The total debt figure includes the combined domestic and external debt stocks of the Federal Government, 36 state governments, and the Federal Capital Territory. The quarterly increase of 10.35% (N12.63 trillion) was largely driven by the depreciation of the Naira, which increased the Naira value of external debt, along with a rise in domestic debt.
Nigeria’s external debt in Naira terms rose to N63.07 trillion in June 2024, up from N56.02 trillion in March 2024, while domestic debt increased to N71.22 trillion from N65.65 trillion during the same period. The N5.58 trillion rise in domestic debt was primarily due to new borrowings by the Federal Government to cover the 2024 budget deficit. Domestic debt mainly consists of FGN bonds, treasury bills, treasury bonds, savings bonds, FGN sukuk, promissory notes, and green bonds. As of Q2 2024, FGN bonds and treasury bills accounted for 78% and 18% of the domestic debt stock, respectively.
Nigeria’s public debt has increased significantly in recent years, rising by 1,111.35% over the past twelve years and increasing by 169.38% under the current administration. Based on FY 2023 GDP data at current prices, Nigeria’s debt-to-GDP ratio has now reached 57.29%, exceeding both the country’s self-imposed limit and the IMF’s recommended 40% threshold.
Looking ahead, Nigeria faces a projected fiscal deficit of N9.18 trillion in 2024, with revenue growth constrained and expenses on the rise. Debt servicing and personnel costs consume a significant portion of government spending, reducing fiscal flexibility. Given these challenges, public debt levels are likely to keep increasing in the near term.
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