DMO: New Borrowings, Promissory Notes, Others Pushed Nigeria’s Public Debt to N46.25tn

*External debt service gulped $2.4bn

Ndubuisi Francis in Abuja

The total public debt stock consisting of the domestic and external debt Stocks of the Federal Government of Nigeria (FGN), the sub-national governments (36 states governments) and the Federal Capital Territory (FCT) rallied to N46.25 trillion or $103.11 billion as at December 31, 2022, the Debt Management Office (DMO) has said.

This signified an increase of N1.65 trillion over the N44.6 trillion posted in the previous quarter. The comparative figure for December 31, 2021, was N39.56 trillion or $95.77 billion.
In terms of composition, the DMO explained that the N46.25 total debt stock had a domestic debt component of N27.55 trillion ($61.42 billion) while total external debt stock was N18.70 trillion ($41.69 billion).

Meanwhile, the total public debt to Gross Domestic Product (GDP) ratio for December 31, 2022, was 23.20 per cent, which the DMO said, indicated a slight increase from the figure for December 31, 2022, at 22.47 per cent.
“The ratio of 23.20 per cent is within the 40 per cent limit self-imposed by Nigeria, the 55 per cent limit recommended by the World Bank/International Monetary Fund, and the 70 per cent limit recommended by the Economic Community of West African States,” it said.
The agency adduced reasons for the increase in the total public debt stock, saying they included new borrowings by the FGN and sub-national governments, primarily to fund budget deficits and execute projects.

The issuance of Promissory Notes by the FGN to settle some liabilities also contributed to the growth in the debt stock, it added.
The DMO noted that on-going efforts by the government to increase revenues from oil and non-oil sources through initiatives such as the Finance Acts and the Strategic Revenue Mobilisation initiative were expected to support debt sustainability.
However, an analysis of the latest debt data showed that external debt service gulped $2.4 billion ($2,405,467,502.58) between January and December 31, 2022.
Over $1.45 billion ($1,450,299,481.56) or 60 per cent of the total external debt service cost went into servicing commercial loans (Eurobonds/Diaspora Bond) between January and December.

The sum of $618.613 million ($618,613,241.22) or 26 per cent of the total external debt service cost was used to service multilateral loans while $336.554 million ($336,554,779.80) or 14 per cent went into bilateral loans service.
The amount of debt sloshing around the global economy witnessed its first annual drop in dollar terms since 2015, with a $4 trillion decline in 2022, a recent report by the Institute of International Finance (IIF), the global association of the financial industry, said.
Despite the drop, the IIF stated that the amount of developing world debt, including Nigeria’s, hit a new record high of $98 trillion, with Russia, Singapore, India, Mexico and Vietnam seeing the largest rises.

Nigeria’s public debt burden, including the N22.7 trillion Ways and Means Advances from the Central Bank of Nigeria (CBN) has continued to balloon, and is projected to hit N77 trillion or $171.8 billion (at the exchange rate of N448/$ when the tenure of the current administration terminates on May 29.
The IIF report noted: “The external public debt burden of many developing countries worsened due to sharp losses in local currencies against the dollar.”