The Debt Management Office (DMO) has disclosed that Nigeria’s total public debt reached ₦142.3 trillion ($88.89 billion) as of September 2024.
The surge is an increase of ₦8.02 trillion compared to the ₦134.3 trillion recorded three months earlier. This resulted from exchange rate fluctuations, growing domestic borrowing, and Nigeria’s fiscal policy directions.
The country’s debt stock consists of external and domestic borrowings undertaken by the Federal Government, state governments, and the Federal Capital Territory (FCT).
External and Domestic Debt Split
External debt accounts for ₦68.89 trillion ($43.03 billion), 48.4% of the total debt stock. This showed the rate at which Nigeria relies on foreign loans to fund development projects and address budget deficits.
Meanwhile, domestic debt stands at ₦73.43 trillion ($45.87 billion), contributing 51.6% of the overall figure. The Federal Government alone is responsible for ₦69.22 trillion ($43.23 billion) of the domestic debt, while state governments and the FCT owe ₦4.21 trillion ($2.63 billion).
Debt Growth and Exchange Rate Impact
From June to September 2024, Nigeria’s debt increased by ₦8.02 trillion (5.97%), driven by high domestic borrowing and the depreciation of the naira against the US dollar.
The exchange rate weakened from ₦1,470.19/$ in June to ₦1,601.03/$ in September, amplifying the naira value of external obligations. While external debt in dollar terms grew marginally by 0.29%, its naira equivalent surged by 9.22%.
Composition of Domestic Debt
Federal Government bonds were the largest domestic debt component, growing by 4.47% to ₦54.65 trillion. Other components include Nigerian Treasury Bills, which declined slightly to ₦11.73 trillion, and promissory notes, which increased to ₦1.77 trillion.
Retail-focused instruments like Federal Government Savings Bonds also recorded growth, reflecting increased participation from smaller investors.
External Debt Profile
External debt, valued at $43.03 billion, is primarily composed of multilateral loans, which account for 50.6% of the total and increased slightly to $21.77 billion. Obligations to bilateral lenders, including China and France, declined marginally, while commercial loans, such as Eurobonds, remained steady at $15.12 billion.
The issuance of a $2.2 billion Eurobond in December 2024 further expanded Nigeria’s external debt, aimed at funding the national budget.
The DMO’s report revealed Nigeria’s increased reliance on borrowing to finance budget deficits and support development projects. While domestic borrowing has grown, external loans remain essential to fund infrastructure and social initiatives.
However, the rapid depreciation of the naira, coupled with mounting debt obligations, is limiting debt sustainability. Rising debt servicing costs, declining oil revenues, and high inflation rates further compound the fiscal challenges.
Initiatives to moderate short-term domestic borrowing are evident, with reductions in Treasury bills and Sukuk. Nonetheless, Nigeria’s issuance of its first domestic dollar-denominated bond added ₦1.47 trillion to the debt stock, pointing to the need for innovative funding mechanisms.
