Why Nigeria’s Debt Profile Increased by Nearly 25 Percent in 3 Months

A new report by the Debt Management Office (DMO) shows that Nigeria’s debt profile has grown by nearly 25 percent, from ₦97.34 trillion in December of last year to ₦121.67 trillion. This represents an increase of ₦24.33 trillion within the last three months.

Nigeria’s Total Public Debt consists of the country’s total Domestic and External Debts of the Federal Government of Nigeria (FGN), as well as the entire 36 states, including the Federal Capital Territory, Abuja.

According to the report, Nigeria’s external debt accounted for 46.05 percent of the total debt, while domestic debt represents 53.95 percent, or ₦65.65 trillion.

The DMO noted that the increase in the country’s domestic debt was due to “new borrowing to part-finance the 2024 Budget deficit and securitisation of a portion of the ₦7.3 trillion Ways and Means Advances at the Central Bank of Nigeria.”

While the newly released debt profile covered the month of March only, the new borrowings were not captured.

Wale Edun, the Minister of Finance and Coordinating Minister of the Economy, announced on June 13 that the Federal Government had secured two major “financial support packages” from the World Bank valued at $2.25 billion.

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Also, in May, the country secured a $500 million World Bank loan to boost electricity distribution in the country. Prior to this, the Federal Government had received $750 million from the World Bank for humanitarian and social reforms and $1.5 billion for its economic stabilization plan.

While hinting that borrowing, as provided in the 2024 Appropriation Act, will continue, the DMO expects improvements in the Government’s revenue to enhance debt sustainability.