Nigeria’s Public Debt Rises To N142.3 Trillion In Q3 2024, Driven By Naira Depreciation

Nigeria’s total public debt rose to ₦142.3 trillion as of September 30, 2024, reflecting a 5.97% increase (₦8.02 trillion) compared to ₦134.3 trillion in June 2024.

The Debt Management Office (DMO), in its latest report, attributed the rise to increased domestic borrowing and the impact of naira depreciation on external debt.

External Debt Growth Driven By Currency Depreciation

While Nigeria’s external debt in dollar terms grew marginally by 0.29% (from $42.90 billion in June to $43.03 billion in September), its naira equivalent surged by 9.22%, from ₦63.07 trillion to ₦68.89 trillion. This was primarily due to the naira’s depreciation, as the exchange rate weakened from ₦1,470.19/$ to ₦1,601.03/$ during the period.

Mixed Performance In Domestic Debt

Domestic debt recorded a 5.34% decline in dollar terms (from $48.45 billion to $45.87 billion). However, in naira terms, it increased by 3.10%, rising from ₦71.22 trillion to ₦73.43 trillion.

Federal Government Debt: Domestic debt held by the Federal Government increased from ₦66.96 trillion to ₦69.22 trillion.

State And FCT Debt: Debt owed by states and the Federal Capital Territory declined slightly, from ₦4.27 trillion to ₦4.21 trillion.

Federal Government bonds remained the largest domestic debt component, growing by 4.47% to ₦54.65 trillion, or 78.95% of the total domestic debt. The introduction of a domestic dollar-denominated bond added ₦1.47 trillion to the debt stock.

Other Domestic Debt Components

Treasury Bills: Declined by 0.66% to ₦11.73 trillion.

Promissory Notes: Increased by 5.80% to ₦1.77 trillion.

FGN Sukuk: Declined by 9.14% to ₦992.56 billion.

FGN Savings Bonds: Grew by 16.11% to ₦64.09 billion.

Green Bonds: Remained unchanged at ₦15 billion.

External Debt Composition

Multilateral Debt: Rose by 0.67% to $21.77 billion, dominated by obligations to the World Bank, which added $513.06 million to its portfolio.

Bilateral Loans: Declined by 1.33% to $5.81 billion, with Chinese loans reducing by $99.98 million.

Commercial Loans: Stable at $15.12 billion, representing 35.14% of external debt.

Eurobond Issuance In Q4 2024

In December 2024, Nigeria raised $2.2 billion via Eurobonds, including a 6.5-year $700 million bond at 9.625% and a 10-year $1.5 billion bond at 10.375%. Proceeds are expected to fund the 2024 budget amid revenue shortfalls.

Implications

The rising debt, combined with naira depreciation and increased reliance on domestic borrowing, raises concerns about Nigeria’s debt sustainability. Further increases are anticipated as Q4 Eurobond proceeds are added to the debt profile.