External Debt More Than 50% Concessional


Monday, July 15, 2019  / 09:12AM / By FBNQuest Research / Header Image Credit: allAfrica.com


The FGN’s external debt obligations at end-March totaled US$25.61bn, equivalent to 6.1% of 2018 GDP. This includes the external borrowings of state governments, which are necessarily guaranteed by the FGN and stood at US$4.23bn at end-December. The debt stock increased by just US$340m over the quarter. There was no new commercial borrowing in Q1: the small rise was accounted for by increases of US$230m and US$80m in outstanding obligations to the World Bank Group and Exim Bank of China respectively.                                                                                                     

From a financing perspective, it is worth noting that 56.4% of the debt stock is still due to multilateral and bilateral creditors on concessional terms. The ratio was 55.8% at end-December.

The 2019 budget projects external financing of N840bn (US$2.75bn at the CBN rate of N306). The objective is to boost the non-market share of the external debt stock by seeking budget loans from the likes of the World Bank and African Development Bank (AfDB).

As a pointer, we note that the FGN went down this route in 2015 and 2016 but failed to secure any credit from the World Bank and had only limited success with the AfDB. It ran into the roadblock of policy conditionality on a range of issues.


FGN external debt by lender group, Mar 2019 (% shares) Total: US$25.61bn

 Proshare Nigeria Pvt. Ltd.

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


We like to make parallels with Egypt from a sovereign credit perspective. It has a US$12bn three-year credit arrangement with the IMF and has recently removed fuel subsidies within its attached reform programme. In contrast, the FGN has never borrowed from the Fund, and the presidency supports the retention of such subsidies.


Proshare Nigeria Pvt. Ltd.

Related News

  1. DMO Releases Q1 2019 Public Debt Data – Marginal Increase of 2.3% in Total Public Debt Recorded
  2. DMO Clarifies Media Reports on Eurobond Issuance by Nigeria in 2019
  3. Nigerian Eurobonds Maintain Strong Rally as Global Central Banks Turn Dovish
  4. Nigerian Eurobonds Surge on Trump-Xi’s Planned Meeting at G-20 Summit
  5. Federal Government of Nigeria Issues N15 billion Series II Green Bond
  6. DMO Releases Public Debt Data for December 2018
  7. Invest in FGN Monthly Bond Auction – March 2019
  8. March 2019 FGN Savings Bonds Offer For Subscription
  9. Invest in FGN Monthly Bond Auction – February 2019
  10. February 2019 FGN Savings Bonds Offer For Subscription
  11. Invest in FGN Monthly Bond Auction – January 2019
  12. January 2019 FGN Savings Bonds Offer For Subscription

Proshare Nigeria Pvt. Ltd.
Related News