The Debt Management Office (DMO) of Nigeria has clarified that the country’s new borrowing in the first quarter of 2024 was N7.71 trillion, not the N24.33 trillion that some reports suggested.
The fresh borrowing consists of N2.81 trillion from the new domestic borrowing of N6.06 trillion in the 2024 Appropriation Act and N4.90 trillion from the securitization of the N7.3 trillion Ways and Means Advances approved by the National Assembly.
A press statement from the DMO, titled “Explaining the Q1 2024 Public Debt Data,” explains that the N24.33 trillion increase in total debt was due to both fresh borrowing and the devaluation of the naira. The naira’s depreciation from N899.39/$1 in Q4 2023 to N1,330.26/$1 in Q1 2024—a 32.39% drop—caused the naira value of external debt to rise significantly, even though the dollar-denominated debt remained stable.
As of Q1 2024, Nigeria’s total public debt in naira terms stood at N121.67 trillion, up from N97.34 trillion in Q4 2023. The DMO pointed out that while the total external debt stock in dollar terms was relatively flat, the naira value surged due to devaluation. The increase of N16.62 trillion due to naira devaluation, combined with the N7.71 trillion in fresh borrowing, accounts for the total rise in Nigeria’s public debt stock.
“Returning to the trend in the Total Debt Data between Q4, 2023, and Q1, 2024, the increase in Naira Terms of N24.33 trillion is being misinterpreted as New Borrowing. The amount actually represents New Borrowing of N2.81 trillion as part of the New Domestic Borrowing of N6.06 trillion provided in the 2024 Appropriation Act, New Domestic Borrowing of N4.90 trillion as part of the securitization of the N7.3 trillion Ways and Means Advances approved by the National Assembly, as well as, the depreciation in the official Naira Exchange Rate from USD/899.39 in Q4, 2023 to USD/N1,330.26 in Q1, 2024,” the statement read.
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The DMO further clarified that the external debt stock was relatively flat at USD42.50 billion in Q4 2023 and USD42.12 billion in Q1 2024. However, the naira values differed significantly, leading to the perceived sharp increase in the total debt stock. The total debt stock in dollar terms actually declined from USD97.34 billion in Q4 2023 to USD91.46 billion in Q1 2024.
The DMO also emphasized that efforts to attract foreign exchange inflows are expected to bolster external reserves and support the naira exchange rate, potentially mitigating some of these effects in the future.
The total public debt as of March 31, 2024, includes the combined domestic and external debts of the Federal Government of Nigeria (FGN), the thirty-six state governments, and the Federal Capital Territory (FCT). The increase in total debt is largely due to the naira devaluation, which reduced the debt in dollar terms by $16.77 billion, or 18.34%.
DMO Director General Patience Oniha noted that the federal government raised N4.5 trillion out of the N6 trillion target in the 2024 budget, with domestic securities being a major source of government spending.