Nigeria’s public debt stock grew marginally by 2.30% to N24.95 trillion (US$81.27 billion at the exchange rate of N306.95/US$) as of the end of March 2019 from N24.39 trillion as of December 2018, data released by the Debt Management Office (DMO) revealed.

Domestic debt stock accounted for 68.5% of the total debt stock while foreign debt accounted for 31.5%, reflecting continued progress towards achieving the target Debt Stock mix of 60% (Domestic) and 40% (External) as prescribed by the DMO in 2017. The data further revealed that the increase of N560.01 billion in the public debt in Q1 2019, was accounted for largely by domestic debt, which grew by N458.36 billion while external debt increased by N101.65 billion.

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As at Q1 2019, the total public debt to GDP ratio stood at 19.0%, which is below the 25%
debt limit imposed by the government, as well as the 56% World Bank’s sustainability
threshold for countries in Nigeria’s peer group. This suggests the country still has the headroom to embark on more borrowings but on the contrary, the country’s elevated debt service to revenue ratio does not make increased borrowing feasible.

Data from the DMO showed that debt servicing gulped N719.9 billion in Q1 2019. When
annualized, this translates to N2.88 trillion for the full year 2019. To put into context, the annualized amount is equivalent to 98% of the amount approved for capital expenditure in the 2019 budget – N2.93trn. Since there is no publicly available data on Q1 2019 revenue generated for the Federal Government, if we adopt that the sum of N3.96 trillion generated in the prior year, this translates to a debt servicing ratio of 72%.

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