Nigeria’s total domestic debt stock has risen by 133.95 percent to N51.96 trillion as of the end of 2023.
Director-General of the Debt Management Office, Patience Oniha, made this known in an interview with CNBC Africa on the sidelines of the discussions for the establishment of the African Debt Managers Initiative Network spearheaded by the African Development Institute of the African Development Bank in Abuja.
According to her, the federal government had raised N7.04 trillion as total new domestic borrowing in 2023.
Oniha said, “I am happy to say that in 2023, the new domestic borrowing was N7.04tn, and as we speak that has been raised in full. So, I don’t need to explain how we raised it, but it has been raised. When you compare it to the N3.5tn of last year. It tells you that the market has debt for us to raise money.”
As of the end of December 2022, Nigeria’s total domestic debt was N22.21 trillion, which increased significantly by the end of June to N48.32 trillion.
She explained that the major addition to the public debt stock was the inclusion of the N22.71tn securitised FGN’s Ways and Means Advances, which was reflected in domestic borrowings.
Commenting on the makeup of debt, Oniha noted that several of the investors in the securities issued were institutions whose balance sheets were growing including asset managers, fund managers, pension funds, insurance companies, and banks.
She stated, “We still had an auction this week. Subscription levels have been good, and the rates have been very responsible below the monetary policy rate, so it just tells you that there is liquidity.” She declared that the government expects its outing in the domestic market to continue in 2024.
About the foreign market, Oniha pointed out that rates have been high due to high inflation rates.
“There is still uncertainty around the world from the Russia-Ukraine war. So foreign investors are a bit more cautious. Let’s use the word, risk-averse and they are investing in those securities that are triple A or double A rating that are offering them high rates, four per cent, five per cent.”
Oniha, however, argued that based on available data It could be speculated that stability was returning to the market.
The DG decried the challenge that the country has faced with raising enough to meet its need due to high dependence on oil, saying “Several governments had tried to change that narrative, improve revenue, but now we see a presidential committee on fiscal reforms and taxes, so we expect the narrative to change to higher revenues. If you look at the MTEF for 2024 to 2027, you can see the direction in that regard.
“If you increase revenues, clearly your need for borrowing will be reduced. With your revenues, you can provide more services. But also, your debt-service to revenue ratio will be lower.”
As of the second quarter of 2023, Nigeria’s total public debt rose to N87.38tn according to DMO.
