DG, Nigeria's Debt Management Office, Patience Oniha
BusinessTop Story

Nigeria’s Domestic Debt Reaches N66.957trn in H1 2024

"This significant rise is attributed to the government's urgent need to finance the economy, driven by a substantial budget deficit forecast of N9.1 trillion, equivalent to approximately 3.8 percent of GDP"

533

Nigeria’s domestic debt stock has surged to N66.957 trillion in the first half of 2024, representing an 8.74 percent increase from N61.578 trillion at the end of Q1, according to the Debt Management Office (DMO).

This significant rise is attributed to the government’s urgent need to finance the economy, driven by a substantial budget deficit forecast of N9.1 trillion, equivalent to approximately 3.8 percent of GDP.

Persecondnews reports that the budget deficit has exceeded initial projections, with a supplementary budget of N6.2 trillion introduced later in the year.

Additionally, the Central Bank of Nigeria’s (CBN) strategy to curb inflation by reducing excess money in circulation has contributed to the increase in debt stock.

The CBN has continuously raised the monetary policy rate, providing an incentive for investors to purchase government securities considered risk-free and offering tax-exempt returns.

FGN bonds remain the dominant debt instrument, accounting for N52.315 trillion, or 78.13 percent, of the total domestic debt as of June 2024.

Nigerian Treasury Bills (NTBs) follow as the second-largest contributor, with a total debt stock of N11.808 trillion, comprising 17.64 percent of the domestic debt stock. Other instruments include Promissory Notes, FGN Savings Bonds, FGN Sukuk, and Green Bonds.

The federal government is prepared to increase domestic borrowing in the coming quarters due to rising deficits.

The introduction of additional debt instruments, such as the ‘domestic dollar bond, in Q3 2024 is likely to increase domestic debt levels further.

Investors can expect higher returns on debt instruments as the CBN continues to increase the monetary policy rate in response to inflationary pressures.

The increasing cost of debt servicing and growing reliance on domestic markets for fiscal financing underscore the need for prudent debt management.

The DMO’s efforts to diversify the country’s debt portfolio and reduce reliance on domestic borrowing will be crucial in mitigating the risks associated with Nigeria’s rising debt profile.

Leave a comment

Related Articles

Just in: Senate confirms Omolola Oloworaran as DG PENCOM

The Senate on Thursday confirmed the nomination of Omolola Oloworaran for appointment...

Just in: Senate approves Tinubu’s $2.2 bln loan request

The Senate on Thursday approved President Bola Tinubu’s loan request of $2.2...

Just in: Reps reject bill for six-year single tenure for president, governors

The House of Representatives rejected a constitutional amendment bill on Thursday seeking...

Just in: Simon Ekpa, four others arrested in Finland over terror-related activities

Finnish-Nigerian separatist agitator, Simon Ekpa, and four others have been arrested in...

UBA to empower MSME’s with wealth management strategies at its ‘Built to Last’ series

As part of its commitment to deepen the growth and sustainability of...

Just in: FG sacks Nnamdi Azikiwe University VC

The Vice-Chancellor of Nnamdi Azikiwe University, Awka, Anambra State, Prof. Bernard Odoh,...

Senate raises alarm over fresh terrorists’ invasion from Mali, Burkina Faso, urges FG’s action 

Upset by the invasion of terrorists known as Lakurawa into Northern Nigeria...

Boko Haram/ISWAP terrorists’ ambush: Defence HQ confirms killing of 5 soldiers in Borno

The Defence Headquarters has confirmed that Boko Haram/ISWAP terrorists ambushed troops conducting...

Tinubu writes NASS for approval of $2.2bln fresh external loan

President Bola Tinubu has written to the National Assembly, seeking the approval...

NNPC Ltd’s spokesman, Soneye, explains delay in Port Harcourt Refinery rehabilitation, assures of imminent completion

The Nigerian National Petroleum Company Limited (NNPC Ltd.) has acknowledged the challenges...

FirstBank Hosts First-ever China-Africa Interbank Association Forum

FirstBank, the premier West African financial institution and financial inclusion service provider,...

AFCON Qualifier: Nigeria’s Super Eagles Suffer Shocking 2-1 Loss to Rwanda

Nigeria’s Super Eagles concluded their Africa Cup of Nations Group D qualifiers...

Tax reform bills: Nigeria struggling with tax-to-GDP ratio below World Bank’s 15 % benchmark – Speaker Abbas

Mr. Tajudeen Abbas, the Speaker of the House of Representatives, has expressed...

Just in: Again, Anambra sit-at-home claims four vigilance operatives, motorcyclist

Gunmen enforcing Monday’s sit-at-home order in Anambra State launched a deadly attack,...

Tinubu departs Abuja for G20 leaders’ summit in Brazil

President Bola Tinubu will depart Abuja for Rio de Janeiro, Brazil, on...

Breaking: APC’s Aiyedatiwa in landslide victory, wins all 18 LGAs in Ondo guber poll

The All Progressives Congress Candidate, Gov. Lucky Aiyedatiwa, has swept the 2024...

Ondo guber poll: Aiyedatiwa votes, says exercise peaceful, PDP raises alarm over thugs invasion

As the Ondo State governorship election kicks off on Saturday, Gov. Lucky...

Late COAS Lagbaja buried in Abuja amid tears, tributes

Amid tears and tributes, the body of the late Chief of Army...

UBA to raise N239.4bln via right issues – Elumelu

The Group Chairman of United Bank for Africa, Tony Elumelu, has announced...

Tinubu appoints Daniel Bwala, Atiku’s ex-spokesman as Special Adviser on Media, three DGs

President Bola Tinubu has appointed Daniel Bwala, the Special Adviser on Media...