Nigeria’s total public debt portfolio now stands at N48.93trn

Nigeria’s total public debt portfolio now stands at about N48.93 trillion, with the government borrowing about N3.73 trillion over the past five months.

A breakdown indicated that Nigeria’s domestic debts have risen to about N30.643 trillion, primarily due to new borrowings of about N1.599 trillion in the fourth quarter of 2022 and N2.129 trillion between January and February 2023.

Nigeria’s external debt increased to N18.282 trillion, mainly due to the depreciation of the naira against the dollar.

The national debt portfolio for the third quarter ended September 30, 2022, published by DMO indicated that Nigeria had total debt of N44.064 trillion, including domestic borrowing of about N26.916 trillion and converted external debts of N17.148 trillion.

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A breakdown of the debt issuances showed that about N852.926 billion were raised through the Nigerian Treasury Bills (NTBs), N4.174 billion through the Federal Government of Nigerian Savings Bonds (FGNSBs) and N741.55 billion through regular bond and Sukuk issuances in fourth quarter 2022.

In January 2023, the government raised N662.617 billion through its regular bond auction, N277.468 billion through the NTBs and N533.03 million through the FGNSBs, a retail monthly debt issuance introduced in 2017.

It raised N1.189 trillion in February 2023, including N770.56 billion through bond auctions, N417.064 billion through NTBs and N1.271 billion through the FGNSBs. Total borrowings in February 2023 represented a 26.4 per cent increase above N940.62 billion raised in January 2023.

The total debt issuance in the past two months represented more than a 33 per cent increase on the total debt issuance in the fourth quarter of 2022.

According to DMO, out of the N2.129 trillion raised so far this year, only N1 trillion has been deployed for deficit financing, 14.2 per cent of total estimated domestic borrowings of N7.043 trillion in the 2023 budget. The agency said the balance of the funds raised was for refinancing maturing obligations.

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The federal government laid out a budget size of N20.51 trillion on a total revenue of N9.73 trillion in 2023, with plans to borrow N10.78 trillion in 2023.

Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, at the public presentation of the breakdown and highlights of the 2023 budget proposal, said the overall budget deficit of N10.78 trillion for 2023 would largely be financed through domestic loans.

She outlined that the budget deficit would be financed mainly by borrowings including domestic sources, N7.04 trillion; foreign sources, N1.76 trillion; multilateral and bi-lateral loan drawdowns, N1.77 billion and expected N206.18 billion proceeds from the privatisation of national assets.

Nigeria’s public debt has continued to generate intensive debate on the growing size of indebtedness and the burden of sustainability amidst declining national revenue.

READ ALSO: Nigeria’s 2021 budget deficit hits N5.6trn as public debts rises

Also, while experts agreed that rising demand for sovereign debts provides the government with a comfortable fallback option, many analysts said the government’s domestic mop-up may crowd out other issuers and raise the cost of funds.

Ahmed had raised the possibility of a higher budget deficit and financing in 2023, noting that “there is a continuing need to exceed this threshold considering the existential security challenges facing the country”.

She however said Nigeria has no plan to restructure its debt as the government remains committed to meeting its domestic and external debt obligations.

Debt-service to total revenue ratio stood at 61.3 per cent in 2020, rose to 90.9 per cent in 2021 and currently stands at 84.5 per cent. Debt-service-to-total revenue was about 32.7 per cent in 2015.