Nigeriaâs total debt stock has increased to N142.3 trillion as of September 30, 2024, an increase of 5.97% relative to N134.3 trillion in June last year.
The debt comprises external and domestic borrowings and shows the significant effect of exchange rate devaluation on external borrowings in naira terms.
Data from the Debt Management Office (DMO) shows that the countryâs external obligations rose slightly by 0.29% from $42.90 billion in June to $43.03 billion in September last year.
However, in local currency terms, Nigeriaâs external debt increased by 9.22%, from N63.07 trillion to N68.89 in the first nine months of 2024.
The increase was due to the nairaâs depreciation, with the exchange rate declining from N1,470.19 per dollar in June to N1,601.03 by September 30, 2024.
Domestic debt dropped by 5.34% in dollar rates from $48.45 billion in June to $45.87 billion in September last year.
During the review period, domestic debt rose by 3.10% in naira terms, from N71.22 trillion to N73.43 trillion.
The Nigerian governmentâs external debt stood at $38.12 billion in September, up from $38.01 trillion in June, while the debt of states and Abuja was $4.91 billion, an increase of $4.89 billion.
Nigeriaâs domestic debt rose from N66.96 trillion, while states and Abuja owed N4.21 from N4.21 trillion.
Nigeriaâs public debt dipped by 2.70% in dollar terms, from $91.35 billion in June to $88.89 billion in September 2024.
Punch reports that the rising debt stock, especially naira-denominated debt, raises concerns over sustainability, especially with the exchange rate volatility driving the surge in external debt.
A breakdown of Nigeriaâs debt shows that the countryâs debt stock of N69.22 trillion in September last year was due to increased issuance of FGN bonds and a rise in promissory notes, showing the governmentâs dependence on domestic borrowings to meet financial needs.
Debt instrument analysis shows that FGN bonds were the largest, at 4.47%, to N54.65 trillion in September last year from N52.32 trillion in June.
The figure represents 78.95% of the total domestic debt, from 78.13% in the previous quarter.
The bond issuance in naira contributed to most of the spike, as the dollar-based bond was recently introduced to the domestic stock at N1.47 trillion.
The development comes as the Nigerian government spent N8.94 trillion on debt servicing in the first nine months of 2024, accounting for 47% of total expenditure.
The amount is a 56.8% increase from the N5.69 trillion spent in the same period in 2023.
The government retained N6.08 trillion in revenue in the period, while debt servicing costs overshadowed the amount. The trend shows an increasing dependence on borrowing and existing debts.
According to reports, recurrent expenditure increased to N15.11 trillion in the first three quarters of 2024, representing 45.6% from the N10.38 trillion in 2023.
