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Nigeria Accumulates N7.71 Trillion in New Debt for Q1 2024, Reports DMO |
The Debt Management Office (DMO) has announced that Nigeria has taken on new debts amounting to N7.71 trillion in the first quarter of 2024.
This new debt includes N2.81 trillion as part of the N6.06 trillion domestic borrowing planned in the 2024 Appropriation Act, and N4.90 trillion from the securitization of Ways and Means Advances worth N7.3 trillion, which received approval from the National Assembly.
The DMO, in a statement titled "Explaining the Q1 2024 Public Debt Data," noted that the N24.33 trillion increase in the total debt is due to the new borrowings and the naira's devaluation.
A significant devaluation of the exchange rate was observed by the DMO, from N899.39/$1 at the close of Q4 2023 to N1,330.26/$1 in Q1 2024, marking a 32.39% devaluation. This devaluation led to a sharp rise in the naira valuation of the external debt, while the actual dollar-denominated debt remained largely the same.
Nigeria's total public debt stood at N121.67 trillion as of Q1 2024, up from N97.34 trillion at the end of Q4 2023¹²³.
The DMO explained that the total external debt stock was almost unchanged in dollar terms, but the naira valuation saw a significant increase due to the currency's devaluation.
With N7.71 trillion recognized as new borrowing, the remaining N16.62 trillion of the total debt increase is attributed to the devaluation of the naira.
This N16.62 trillion increment, combined with the N7.71 trillion of new domestic borrowing, accounts for the overall rise in Nigeria’s public debt.
The DMO elaborated: "The N24.33 trillion growth in the Total Debt Stock in Naira Terms between Q4, 2023, and Q1, 2024, has been misinterpreted as entirely New Borrowing. In fact, it includes New Borrowing of N2.81 trillion as part of the N6.06 trillion domestic borrowing from the 2024 Appropriation Act, N4.90 trillion from the securitization of the N7.3 trillion Ways and Means Advances approved by the National Assembly, and the devaluation of the naira from USD/899.39 in Q4, 2023 to USD/N1,330.26 in Q1, 2024.
Consequently, while the Total External Debt Stock was consistent at USD42.50 billion in Q4, 2023, and USD42.12 billion in Q1, 2024, the naira valuations differed significantly at N38.22 trillion and N56.02 trillion respectively, a difference of N17.8 trillion. This difference accounts for the substantial increase of N24.33 trillion in the Total Debt Stock in Q1, 2024. The alteration in the Exchange Rate also explains the reduction in the Total Debt Stock in US Dollar Terms, from USD97.34 billion in Q4, 2023 to USD91.46 billion in Q1, 2024."
