According to a recent report from the Debt Management Office (DMO), Nigeria’s total public debt rose to an unprecedented N142.3 trillion as of September 30, 2024. This marks a 5.97 percent increase, equivalent to N8.02 trillion, from N134.3 trillion recorded at the end of June 2024.
The report notes that the debt comprises both external and domestic obligations, with the depreciation of the naira significantly affecting external borrowings in naira terms.
While external debt in dollar terms increased marginally by 0.29 percent, from $42.90 billion in June to $43.03 billion in September, its naira equivalent surged by 9.22 percent due to the naira’s weakening from N1,470.19/$ to N1,601.03/$ during the quarter.
Domestic debt also showed mixed trends. In dollar terms, it decreased by 5.34 percent, falling from $48.45 billion in June to $45.87 billion in September. However, in naira terms, domestic debt rose by 3.10 percent, increasing from N71.22 trillion to N73.43 trillion.
The Federal Government accounted for the majority of both external and domestic debt. Its external obligations grew slightly to $38.12 billion, while its domestic debt rose from N66.96 trillion to N69.22 trillion during the period. In contrast, states and the Federal Capital Territory saw minor changes in their debt profiles.
A deeper analysis of domestic debt instruments shows that Federal Government bonds remain the largest component, increasing by 4.47 percent to N54.65 trillion.
The government also introduced its first domestic dollar-denominated bond, adding N1.47 trillion to the domestic debt stock. This bond, issued at a 9.75 percent annual coupon, received strong interest, with over $900 million in subscriptions.
Meanwhile, other domestic instruments like Treasury Bills showed a slight decline, dropping by 0.66 percent to N11.73 trillion. Promissory notes, used to settle government obligations such as contractor payments, rose by 5.80 percent to N1.77 trillion.
Similarly, retail-focused instruments like FGN Savings Bonds saw a significant increase, rising by 16.11 percent to N64.09 billion.
Economic analysts have raised concerns about the sustainability of Nigeria’s rising debt profile. Dr. Muda Yusuf, CEO of the Centre for the Promotion of Public Enterprises, warned of potential macroeconomic challenges.
“I think there is a need for us to be very conscious of and watch the rate of growth of our public debt,” he stated, adding that the government should focus on reducing exposure to foreign debts.
