Nigeria’s Debt Soars to N134.3 trln.

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Nigeria’s public debt stock climbed by N12.6 trillion in the second quarter of 2024, reaching a record N134.3 trillion ($91.3 billion), driven primarily by the naira’s sharp devaluation.

The rise marks a 10.35% increase from the N121.7 trillion ($91.5 billion) debt recorded in Q1, underscoring the dual pressures of currency depreciation and persistent fiscal deficits.

According to an official document reviewed at the IMF and World Bank annual meetings in Washington D.C., while the debt surge in naira terms is striking, the dollar-denominated debt levels remained largely stable.

Domestic debt rose 8.45% to N71.2 trillion ($48.4 billion) in Q2, representing 53% of Nigeria’s total debt, while external debt edged up by $780 million to $42.9 billion. Nigeria’s debt-to-GDP ratio also breached 50%, raising alarms over long-term fiscal sustainability.

Reflecting a heavy reliance on local financing, FGN Bonds comprised 78% of domestic debt, supplemented by instruments such as Treasury Bills, Savings Bonds, and Green Bonds.

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Internationally, multilateral loans from entities like the World Bank and the African Development Bank formed 50.4% of Nigeria’s external debt portfolio, with commercial loans at 35.9% and bilateral debt at 13.7%.

Oversubscribed Dollar Bond Defies IMF Advice

In a move that defied IMF guidance, Nigeria’s recent $500 million domestic bond issuance was oversubscribed, attracting over $900 million in investor commitments.

Minister of Finance, Wale Edun confirmed the oversubscription, highlighting strong demand despite the IMF’s recommendation against issuing dollar-denominated domestic bonds.

“While we take the IMF’s advice into consideration, our policy decisions align with Nigeria’s financial goals and market demands,” Edun noted.

The dollar bond, launched at a $1,000 per unit buy-in, underscores Nigeria’s flexible approach to financing amid global uncertainties.

As Nigeria navigates a challenging fiscal environment, Edun acknowledged the IMF’s support through concessional funding and policy guidance, while emphasizing the nation’s discretion in heeding recommendations.

1. (Edited by Oludare Mayowa; omayowa@globalfinancialdigest.com;