Manageable Rise in the FGN's Domestic Debt


Tuesday, July 07, 2020 / 09:50 AM / by FBNQuest Research / Header Image Credit: Business Day


The latest quarterly data release from the DMO puts the FGN's domestic debt stock at N14.53trn (US$37.7bn) at end-March, equivalent to 10.1% of 2019 GDP. The total rose by N260bn in the quarter, and the stock of promissory notes, issued to clear FGN arrears to contractors, oil marketers and state governments, by N220bn to N960bn.

Proshare Nigeria Pvt. Ltd.


This figure could reach N2.5trn on the verification of claims. Additionally, there has been talk of securitizing the FGN's ways and means advances from the CBN. There was also a small increase of N40bn in the stock of FGN bonds in Q1.


The domestic debt stock has increased by N1.42trn over the past 12 months or by 10.8% because of the issue of new pro-notes and because the FGN has not issued Eurobonds since November 2018. It has pledged not to tap this market this fiscal year.


Total public debt at end-March reached N28.63trn according to the DMO's measure, equivalent to 19.9% of GDP. This covers all the obligations of the three tiers of government. If we add AMCON bonds, and the debt of the NNPC and other public agencies, we should still be a little below 30% of GDP. In line with established practice, the data do not cover the CBN's issuance of NTBs within its open market operations. Also, most data series for public debt (including the DMO's) do not cover the obligations of central banks.


This debt stock/GDP ratio compares very well with peer EMs. Public debt in Kenya, for example, represented 61.1% of GDP in June 2019.


FGN domestic debt (N trn)


Proshare Nigeria Pvt. Ltd.


Sources: Debt Management Office (DMO); FBNQuest Capital Research


The weakness of the story is the burden of debt service. The 2020 budget, approved by the National Assembly, has total debt service at 48.1% of total FGN revenue. The reality could prove rather worse.

Proshare Nigeria Pvt. Ltd.


Related News

1.       Nigeria's Total Public Debt Stood At N27.40trn in Q4 2019 - NBS

2.      Nigeria's Total Public Debt Stood At N26.14trn in Q3 2019 - NBS

3.      DMO Releases Public Debt Data as at Sept 2019 and Plans to Issue a Third Sovereign Sukuk

4.      Nigeria's Total Public Debt Stood At N25.70trn in Q2 2019 - NBS

5.      Nigeria's Total Public Debt Stood At N24.97trn in Q1 2019 - NBS

6.      DMO Releases Q1 2019 Public Debt Data - Marginal Increase of 2.3% in Total Public Debt Recorded

7.      DMO Releases Public Debt Data for December 2018

8.     Nigeria's Total Public Debt Stock Stood At $73.21bn or N22.43trn in Q3 2018

9.      DMO Releases Public Debt Data for June 2018; FGN Domestic Debt Declines

10.  Public Debt Vulnerable to Exchange Rate Movements

11.   DMO Publishes Q1 2018 Debt Data; Total Public Debt Stood At N22.71trn or US$74.28bn

12.  Total Public Debt as at December 31, 2017 Represents 18.20% of Nigeria's GDP for 2017 - DMO

13.  Nigerian Public Debt - A Comparative Analysis

14.  Public debt indicators still very healthy

Proshare Nigeria Pvt. Ltd.

Proshare Nigeria Pvt. Ltd.

Related News