Nigeria’s Debt Soars to ₦134 Trillion, Exceeds 40% of GDP

…Debt Service Costs Jump 38% to ₦3.4 Trillion

 

Nigeria’s public debt has reached a critical level, hitting ₦134.297 trillion (56.23% of GDP) by the end of June 2024, surpassing the national debt-to-GDP threshold of 40%, according to the Central Bank of Nigeria (CBN). This substantial figure represents 56.23% of the country’s GDP and marks a breach of the national debt-to-GDP threshold of 40%.

 

The CBN’s latest quarterly statistical bulletin attributes this significant increase to two key factors: the depreciation of the national currency and new borrowings incurred to fund the 2024 budget deficit. The rising debt burden raises concerns about its potential impact on future economic growth and stability.

 

The CBN’s Monthly Economic Reports for October 2024 also stated that the debt remains below the 70% threshold for market-access countries, the breach of the national limit raises concerns about the country’s fiscal sustainability and the burden of debt servicing on the economy.

 

A further breakdown of the debt profile shows a near-even split between domestic and external debt, with domestic debt accounting for 52.98% and external debt constituting 47.02%. The federal government holds the lion’s share of the consolidated debt stock, owing ₦118.949 trillion, representing 88.67% of the total.

 

Debt service costs also surged, rising 37.95% to ₦3.419 trillion by the end of June 2024, compared to ₦2.479 trillion in March. Domestic debt service constituted ₦1.863 trillion, while external debt service accounted for ₦1.556 trillion. The increase was primarily due to repayments of maturing external debts and FGN bonds.

 

“Public debt stock was above the 40.00 per cent national threshold at end-June 2024, but remained within the 70.00 per cent threshold for market-access countries. Total public debt outstanding stood at ₦134,297.67 billion (56.23% of GDP), at end-June 2024. The rise was due, largely, to the revaluation effects arising from exchange rate depreciation and new borrowings to finance the deficit in the 2024 budget. A breakdown of the consolidated public debt showed that domestic debt accounted for 52.98 per cent, while external debt constituted 47.02 per cent. Of the consolidated public debt stock, FGN owed ₦118,949.78 billion (88.67%), while state governments owed the balance. A disaggregation of the FGN debt indicated that domestic debt was ₦66,957.88 billion (51.49%), while external debt constituted ₦63,072.68 billion (48.51%).

 

“Further analysis showed that FGN Bonds maintained its dominance, with 78.13 per cent of the total domestic debt stock, followed by treasury bills (17.64%), promissory notes (2.50%), and FGN Sukuk (1.63%), while others constituted the balance. Of the total external debt stock, multilateral accounted for 50.41 per cent, commercial (35.87%) and bilateral loans (13.72%).

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“Debt service at end-June 2024 rose by 37.95 per cent to ₦3,419.85 billion, from ₦2,479.00 billion at end-March 2024. This was attributed, primarily, to the repayment of maturing external debt, including commercial, multilateral loans, and the redemption of FGN bonds. A breakdown showed that domestic debt service was ₦1,863.52 billion (54.49%), while external debt service constituted ₦1,556.33 billion (45.51%),” CBN says.