Nigeria’s public debt accelerates to N31.01 trillion
Based on Nigeria's 2019 gross domestic product (GDP), the latest debt figure represents a debt-to-GDP ratio of 21.5 per cent.
The Debt Management Office (DMO) on Wednesday released Nigeria’s public debt data for the second quarter of 2020. According to the latest data, Nigeria’s total public debt stood at N31.009 trillion ($85.9 billion) at the end of June 2020, representing an increase of 8.3 per cent from N28.628 trillion recorded on March 31, 2020. Accordingly, Nigeria’s debt profile increased by N2.38 trillion ($6.59 billion) between March and June this year.
Per a statement by the DMO, total public debt stock comprises the debt portfolios of the Federal Government (FG), the 36 state governments and the Federal Capital Territory (FCT).
"The increase in the debt stock by N2.381 trillion or USD6.593 billion was accounted for by the USD3.36 billion Budget Support Loan from the International Monetary Fund, New Domestic Borrowing to finance the Revised 2020 Appropriation Act, including the issuance of the N162.557 billion Sukuk, and Promissory Notes issued to settle Claims of Exporters," the DMO stated.
Nigeria’s external debt increased by N1.38 trillion during the period under review to N11,363 trillion. The country's external debt in Q2 2020 represented 36.65 per cent of the total debt, compared to 34.89 per cent and 32.93 per cent in Q1 2020 and Q4 2019, respectively.
Meanwhile, the ratio of domestic debt decreased by 1.76 percentage points to 63.35 per cent between March and June this year. In 2019, the DMO said it aimed to achieve a debt stock ratio of 60 per cent (domestic debt) to 40 per cent (external debt). The value of the total domestic debt stock in Q2 2020 was N19.65 trillion, up 5.4 per cent compared to N18.64 trillion reported in Q1 2020.
The increase recorded in Nigeria's domestic debt profile included increases in the FG’s debt as well as the debt stock of the 36 states and the FCT. The FG's domestic debt increased by 6.4 per cent to N15.46 trillion in Q2 2020, accounting for 49.9 per cent of the total debt stock.
According to DMO data, the 36 states and FCT's domestic debt profile was N4.19 trillion as at June ending, representing 13.5 per cent of the total debt stock. Lagos State had the highest domestic debt stock at N493.3 billion, followed by Rivers (N266.9 billion), Akwa Ibom (N239.2 billion), Delta (N235.9 billion) and Cross River (N165 billion).
Based on Nigeria's 2019 gross domestic product (GDP), the latest debt figure represents a debt-to-GDP ratio of 21.5 per cent. The country’s public debt has increased by N18.9 trillion (or 155.9 per cent) from N12.12 trillion as of June 30, 2015 to the figure for the current reporting period.
The DMO said Nigeria's public debt profile is expected to grow as the balance of the FG’s additional domestic borrowing is raised and expected disbursements are made by the World Bank, African Development Bank and the Islamic Development Bank, which were arranged to address the severe economic impact of the Covid-19 pandemic and the sharp fall in oil prices. New borrowings by state governments are also expected to increase the public debt stock.
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