Data from the Debt Management Office, DMO, shows that Nigeria’s total public debt rose to N142.3 trillion as of September 30, 2024.
The figure is an increase of 5.97 per cent (N8.02tn) compared to N134.3tn in June 2024.
The debt, comprising external and domestic obligations, reflects the significant impact of exchange rate depreciation on external borrowings when converted to naira terms.
Data from the DMO showed that external debt in dollar terms increased marginally by 0.29 per cent, from $42.90bn in June to $43.03bn in September.
However, in naira terms, external debt surged by 9.22 per cent, rising from N63.07tn to N68.89tn within the quarter.
This sharp increase was attributed to the depreciation of the naira, with the exchange rate weakening from N1,470.19/$ in June to N1,601.03/$ by the end of September.
Domestic debt, on the other hand, reduced by 5.34 per cent in dollar terms, falling from $48.45bn in June to $45.87bn in September.
However, domestic debt in naira terms rose by 3.10 per cent, increasing from N71.22tn to N73.43tn during the period.
The Federal Government’s external debt accounted for $38.12bn in September, up from $38.01bn in June, while states and the Federal Capital Territory held $4.91bn in external debt, a slight increase from $4.89bn.
For domestic debt, the Federal Government’s obligations rose from N66.96tn to N69.22tn, while states and the FCT recorded a minor reduction from N4.27tn to N4.21tn.
Overall, Nigeria’s total public debt in dollar terms fell by 2.70 per cent, from $91.35bn in June to $88.89bn in September.
However, the naira-denominated debt burden remained substantial.
The rising debt profile, particularly in naira terms, raises concerns over debt sustainability, especially with the exchange rate volatility driving up the local currency cost of external obligations.
Further analysis by showed that the Federal Government’s domestic debt stock of N69.22tn as of September 30, 2024, was largely driven by increased issuance of Federal Government bonds and a rise in promissory notes, highlighting the government’s reliance on domestic borrowing to meet fiscal obligations.
Analysis of the debt by instruments shows that Federal Government bonds remained the largest component, rising by 4.47 per cent to N54.65tn in September from N52.32tn in June.
This represents 78.95 per cent of the total domestic debt stock, up from 78.13 per cent in the previous quarter.
The issuance of bonds in naira accounted for the majority of the increase, as the dollar-denominated bond was newly introduced to the domestic debt stock at N1.47tn.
