Nigeria’s public debt has risen to NN134.3 trillion ($91.3 billion) in the second quarter of 2024, according to the Debt Management Office (DMO) under the Ministry of Finance.

This represents a 10.35% increase from the NN121.7 trillion ($91.5 billion) recorded in the first quarter. The devaluation of the naira has been a major factor driving this increase, highlighting challenges related to exchange rate volatility.

The dollar equivalent of the debt has remained relatively stable, while the total debt has grown in naira terms, stressing the impact of currency movements on debt valuation.

In Q2 2024, domestic debt accounted for 53% of the total, amounting to N71.2 trillion ($48.4 billion), while external debt made up 47%, equivalent to N63.1 trillion ($42.9 billion). This data reveals a rising trend in the country’s debt-to-GDP ratio, which has surpassed 50%, raising concerns over fiscal sustainability.

The majority of domestic debt, 78%, is in the form of FGN Bonds, indicating the government’s reliance on local bond markets for financing. Other instruments in the domestic market include Nigerian Treasury Bills, Savings Bonds, Sukuk, Promissory Notes, and Green Bonds, reflecting diverse borrowing options for public financing.

On the external front, multilateral loans accounted for the largest portion, making up 50.4% of external debt, followed by bilateral loans at 13.7%, and commercial loans at 35.9%. These figures demonstrate the balance between concessional financing and market-based borrowing, allowing Nigeria to manage debt obligations while navigating global financial markets.

Although Nigeria heavily relies on domestic borrowing to finance its budget and infrastructure needs, it maintains a diversified external debt portfolio. The growing share of external multilateral and commercial loans emphasises the importance of sustainable debt management, especially in light of exchange rate volatility.

Notably, Nigeria’s debt servicing payments surged by 69% in the first half of 2024, reaching N6.04 trillion, up from N3.58 trillion in the same period of 2023. This sharp rise in debt service obligations, likely driven by naira devaluation for foreign debt repayments, reflects the growing burden on the Federal Government as debt repayment consumes a significant portion of its financial resources.