Nigeria’s Debt Exceeds N44trn, Repayment Burden Worsens

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Nigeria's Debt Exceeds N44trn, Repayment Burden Worsens
Private Debt to Weigh on Global Economic Recovery

Nigeria’s total public debt hits an all-time high of #44.06 trillion, according to the latest report on domestic debt released by the Debt Management Office (DMO), growing from N42 trillion in the second quarter of the year.

The nation’s debt profile is largely driven by local borrowing, accounting for more than 61% and external debt of more than 38% at the end of the third quarter of 2022. Debt service costs rose 23% to N3.04 trillion, according to the data released.

Federal government borrowing accounts for 49% of the local borrowing while more than 12% of this exposure was state government indebtedness. The release excludes more than N20 trillion accessed by the Nigerian government from the apex bank.

Current data shows that FG has raised more than #20 trillion from Central Bank Ways and Means window. Recently, the finance minister hints at a government plan to securitise the sum via the local debt capital market.

At the moment, details about the plan remain sketchy as the market awaits the government’s final decision. Analysts said the level of overdrafts raised by FG via the ways and means window is in breach of the CBN Act.

Fitch Ratings recently downgrade the Nigerian government rating, citing pressures on debt while noting that interest payments have continued to shadow revenue generation. READ: Fitch Downgrades Nigeria as Interest on Debts Exceeds Govt. Revenue

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Also, the local currency has continued to lose weight on account of low export receipts while import bills continue to rise. When fully securitise, Nigeria’s true debt load may be near #70 trillion. # Nigeria’s Debt Exceeds N44trn amidst Fiscal Pressure