Nigeria’s Total Debt Stock Rises to N31 Trillion in H1 2020

The Debt Management Office (DMO) has said Nigeria’s total debt stock stood at N31.009 trillion (US$85.897bn) as of June 30, 2020.

In the press release titled, “DMO Releases June 30, 2020 Public Debt Data”, the debt office said the stated amount comprises the debt stock of the federal government, the 36 state governments and the federal capital territory.

It also noted that the debt rose from N28.628 trillion (US$79.303bn) on March 31 to N31.009 trillion on June 30, 2020.

The increase was attributed to the recent procured US$3.4 billion budget support loan from the International Monetary Fund, new domestic borrowing to finance the revised 2020 appropriation act including the issuance of the N162.557 Billion Sukuk, and promissory notes issued to settle claims of exporters.

Nigeria had to approach multilateral financial institutions for loans following a plunge in the nation’s revenue generation and oil price due to the global pandemic. Both the Central Bank of Nigeria and the Federal Government had adjusted the Naira forex rate from N306/US$ to N379/US$ to protect the nation’s dwindling foreign reserves and instituted other measures to contain the ongoing broad-based decline across the board.

However, despite the measures, the economy contracted by 6.10 percent in the second quarter of 2020 with the inflation rate rising to 12.82 percent while the unemployment rate rose to 27.1 percent or 21.8 million people in the same quarter.

As the nation struggles to curb further economic decline, the DMO said the debt will rise with an increase in new borrowing and expected disbursements from the World Bank and other financial institutions.

It said, “The DMO expects the Public Debt Stock to grow as the balance of the New Domestic Borrowing is raised and expected disbursements are made by the World Bank, African Development Bank and the Islamic Development Bank which were arranged to finance the 2020 Budget.”

“It will be recalled that the 2020 Appropriation Act had to be revised in the face of the adverse and severe impact of COVID-19 on Government’s Revenues and increased expenditure needs on health and economic stimulus amongst others. Additional Promissory Notes are expected to be issued in the course of the year, this, and new borrowings by State Governments are also expected to increase the Public Debt Stock.”