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Nigeria’s debt increases to N26.2 trillion

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Nigeria’s total debt stock comprising the Debts of the federal government, 36 States and the Federal Capital Territory (FCT) as at September 2019 now stands at N26.215 trillion

The Director General of the Debt Management Office (DMO) Ms Patience Oniha made this disclosure in Abuja on Friday at the presentation of Public Debt Data as at September 2019.

According to her: “The comparative figures for September 2018 was N25.701 Trillion which implies that in the 12 months period to September 2019 the Total Public Debt grew by 16.88%.”

The DMO boss also stated that the Total Public Debt as at September 2019 includes Promissory Notes in the amount of N812.650 billion which had been issued to settle the FGN’s arrears to Oil Marketing Companies and State Governments under the Promissory Programme approved by the Federal Executive Council and the National Assembly.

Speaking specifically about the borrowings and how it helped bring Nigeria out of recession, Patience Oniha noted: “Borrowing came in to fund the budget which included capital projects so when you finance capital projects, you create an entire economy around that in terms of employment, in terms of materials that you buy, in terms of what happens in the environment so there are vendors selling all sort of things so that is the description. We are talking about the multiplyer effect of borrowing to finance capital infrastructure and what we generate.”

Oniha also spoke about government issuing promissory notes to its creditors, arguing that “these are arrears so it’s not that they did a contract for us now now and then we decided to issue a promissory note. These are arrears from several years prior to 2017.

“It is voluntary on the part of the creditor you don’t have to take a promissory note. You can wait when government has money in its budget to pay you. There are provisions in the budget just that they are not large so you can’t be sure when you will get it but you can wait there is no compulsion around it.”

With regards to new borrowings, she stated that “the level of New Borrowings in the Appropriation Acts declined consistently since Nigeria exited the recession in the year 2017.

She also reiterated: “The increase in the New Borrowings in the Appropriations Acts between 2015 and 2017 was due to the need to stimulate growth and create jobs in the economy as contained in the Economic Recovery Growth Plan (ERGP).”

According to her, “whereas the 2019 Appropriation Act provided for a total New Borrowing of N1.605 trillion split equally between Domestic and External, only the domestic component of N802.82 Billion was raised due to the late passage of the 2019 Appropriation Act and the expectation that the implementation of the 2020 Budget would commence on January 1, 2020.”

The Ratio of Domestic Debt to External Debt at 69:31 as at September 2019 she said was an improvement over the Ratio of 71:29 as at September 2018 “compared to the target of 60:40 in the Medium-Term Debt Management Strategy.”

The Ratio of Long Term to Short Term Debt in the Domestic Debt as at September 2019 was 80:20, which shows that the target of 75:25 had been outperformed by September 2019. Furthermore, it was an improvement over the Ratio of 73:23 recorded in September 2018.

Oniha stated that “total Debt as a percentage of GDP was 18.47% as at September 2019 was well within the limit of 25% and fares better in comparison with the Debt/GDP ratios of countries such as the United States of America, United Kingdom and Canada with ratios of 105%, 85% and 90% respectively for the same period.”

However, because they generate adequate revenues, their Debt Service/Revenue Ratios for the same period were much lower at 12.5%, 7.5% and 7.5% respectively when compared to Nigeria’s 51% in 2017.

The low revenue base of Nigeria relative to its GDP is clearly reflected in the high Debt Service to Revenue Ratio, thus emphasising the need to grow revenue ovr the years.




Amongst the highlights of the DMO’s achievements for 2019 was the issuance of a 30-year FGN Bond for the first time. The 30-year Bond she explained “was to meet the investment needs of long-term investors such as insurance companies and support the development of the domestic financial markets in areas such as mortgages.”

From the federal government’s perspective the 30-year Bond has contributed to reducing the refinancing risks of the Public Debt Stock. According to her, “the product has enjoyed a strong demand as N284.391 billion had been issued by the end of September 2019.”

The DMO also unveiled its plans for the year 2020, based on the New Borrowings in the 2020 Appropriation Acts, which comprises of N850 billon and N744.99 billion for External and Domestic Borrowings respectively. The New Domestic Borrowings will be raised through FGN Bonds, Sukuk, FGN savings Bonds and possibly Green Bonds. For External Borrowings the strategy is to first seek out concessionary and semi concessionary loans due to the lower interest rate and longer tenors. Any shortfall thereafter may be raised from commercial sources.

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