The Debt Management Office (DMO) has clarified that Nigeria’s fresh borrowing amounted to N7.71 trillion in the first quarter of 2024. This figure includes N2.81 trillion from new domestic borrowing, as stipulated in the 2024 Appropriation Act, and N4.90 trillion from the securitization of the N7.3 trillion Ways and Means Advances approved by the National Assembly.
In its statement titled “Explaining the Q1 2024 Public Debt Data,” the DMO attributed the N24.33 trillion increase in the total debt to a combination of fresh borrowing and naira devaluation. The exchange rate moved from N899.39/$1 in Q4 2023 to N1,330.26/$1 in Q1 2024, representing a 32.39% depreciation. This caused the naira value of external debt to rise sharply, despite the dollar-denominated debt remaining relatively stable.
By the end of Q1 2024, Nigeria’s total public debt in naira terms stood at N121.67 trillion, up from N97.34 trillion in Q4 2023. The DMO highlighted that while the total external debt stock remained almost unchanged in dollar terms, the naira value surged due to the devaluation. This N16.62 trillion increase from naira devaluation, combined with the N7.71 trillion in new domestic borrowing, accounts for the overall rise in Nigeria’s public debt stock.
The statement elaborated: “Returning to the trend in the Total Debt Data between Q4, 2023, and Q1, 2024, the increase in Naira Terms of N24.33 trillion is being misinterpreted as New Borrowing. The amount actually represents New Borrowing of N2.81 trillion as part of the New Domestic Borrowing of N6.06 trillion provided in the 2024 Appropriation Act, New Domestic Borrowing of N4.90 trillion as part of the securitization of the N7.3 trillion Ways and Means Advances approved by the National Assembly, as well as, the depreciation in the official Naira Exchange Rate from USD/899.39 in Q4, 2023 to USD/N1,330.26 in Q1, 2024.”
The DMO further clarified that the total external debt stock remained nearly flat at $42.50 billion and $42.12 billion in Q4 2023 and Q1 2024 respectively, but the naira values differed significantly at N38.22 trillion and N56.02 trillion respectively, a difference of N17.8 trillion. This explains the perceived sharp increase of N24.33 trillion in the total debt stock in Q1 2024. In US dollar terms, the total debt stock actually declined in Q1 2024 to $91.46 billion, compared to $97.34 billion in Q4 2023.