Nigeria’s total public debt stock has surged by N12.6 trillion in just three months, reaching N134.3 trillion ($91.3 billion) by the end of the second quarter of 2024, according to The PUNCH. This represents a 10.35% increase from N121.7 trillion ($91.5 billion) recorded in the first quarter of the year.
The significant rise in debt has been primarily attributed to the devaluation of the naira, as outlined in an official document presented during the World Bank/IMF annual meetings in Washington, D.C., where Nigeria engaged with foreign investors. The document stated, “In Q2 2024, the debt stock grew in naira terms to N134.3 trillion ($91.3 billion) from N121.7 trillion ($91.5 billion) in Q1 2024, driven mainly by exchange rate devaluation. The dollar amount of debt remained relatively stable.”
Despite appearing to decrease in dollar terms, domestic debt has risen by N5.55 trillion, or 8.45%, increasing from N65.65 trillion in Q1 2024 to N71.2 trillion in Q2 2024. External debt also experienced an increase of $780 million, rising from $42.12 billion in the first quarter to $42.9 billion by June 2024.
The document reveals that domestic debt continues to dominate Nigeria’s public debt portfolio, constituting 53% of the total debt stock at N71.2 trillion ($48.4 billion), while external debt accounts for 47%, amounting to N63.1 trillion ($42.9 billion).
Nigeria’s debt-to-GDP ratio has now surpassed 50%. Notably, FGN Bonds make up 78% of domestic debt, indicating the government’s reliance on local bond markets for financing. Other domestic instruments include Nigerian Treasury Bills, Savings Bonds, Sukuk, Promissory Notes, and Green Bonds, reflecting a diverse borrowing strategy.
On the external front, multilateral loans represent 50.4% of total external debt, highlighting Nigeria’s preference for financing from international organizations such as the World Bank and the African Development Bank. Bilateral loans account for 13.7%, while commercial loans make up 35.9% of external debt.
During a meeting with investors, Nigeria’s Minister of Finance and Coordinating Minister of the Economy, Wale Edun, announced that the country’s $500 million domestic bond was oversubscribed, raising over $900 million from investors, despite previous IMF advisories against issuing such bonds. Launched on August 15, with subscriptions starting on August 20 at $1,000 per unit, Edun stated, “The IMF advised us not to issue domestic dollar bonds. However, we went ahead and achieved 100% oversubscription, while still valuing their input.”
He acknowledged the IMF’s role in providing concessional loans, funding, and technical support but emphasized that countries are not obliged to follow all recommendations. “These institutions can provide value, but we don’t always have to take their advice,” he reiterated, highlighting the IMF’s broader contributions to stabilizing the international financial system during critical periods.
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