MON NOV 18 2024-theGBJournal| Nigeria’s public debt increased by 10.4% q/q to N134.30 trillion in Q2-24 (Q1-24: NGN121.67 trillion), according to latest Debt Management Office (DMO) data.
Analysts attribute the increase to new borrowings to finance rising government expenditures against persistent revenue underperformance, as well as the impact of the naira depreciation on foreign debt.
There was a broad-based increase across the domestic (53.0% of the total public debt) and external (47.0% of total public) debt stock consequently.
Specifically, the total domestic debt stock rose by 8.5% q/q to N71.22 trillion (Q1-24: N65.65 trillion), while total external debt increased by 1.9% q/q to USD42.90 billion (vs -0.9% q/q to USD42.12 billion in Q1-24), reflecting additional borrowing from the World Bank (USD1.22 billion) amid matured IMF loan repayments (USD418.8 million).
In naira terms, total external debt rose by 12.6% q/q to N63.07 trillion (Q1-24: N56.02 trillion) using an average exchange rate value of N1,470.19/USD in Q2-24, compared to N1,330.26/USD in Q1-24.
Total debt on a year-on-year basis grew by 53.7%, pushing the country’s debt-to-GDP ratio to 50.8%.
Looking ahead, Codros Research analysts say they anticipate a significant increase in Nigeria’s total debt due to additional borrowings by the FG to fund the 2024 budget deficit (Cordros estimate: N12.85 trillion) and the impact of the depreciation of the naira on foreign debt.
”Thus, we project total public debt to settle at NGN144.34 trillion (or 54.6% of GDP) in 2024E,” Cordros projected in their latest review of Nigeria’s debt trend.
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