Nigeria Borrowed N7.71 Trillion in Q1 2024 – DMO

• Nigeria’s new borrowing in Q1 2024 was N7.71 trillion, including N2.81 trillion from domestic borrowing and N4.90 trillion securitization
• The total debt increase of N24.33 trillion resulted from new borrowing and naira devaluation, not just fresh borrowing alone

The Debt Management Office (DMO) clarified yesterday that Nigeria’s new borrowing amounted to N7.71 trillion in the first quarter of 2024. This borrowing includes N2.81 trillion as part of the N6.06 trillion domestic borrowing outlined in the 2024 Appropriation Act, and N4.90 trillion as part of the securitization of the N7.3 trillion Ways and Means Advances approved by the National Assembly.

In a statement titled “Explaining the Q1 2024 Public Debt Data,” the DMO explained that the total debt increase of N24.33 trillion was due to fresh borrowing and naira devaluation. The exchange rate dropped from N899.39/$1 in Q4 2023 to N1,330.26/$1 in Q1 2024, a depreciation of 32.39%. This caused the naira value of external debt to rise sharply, even though the dollar-denominated debt remained stable.

By Q1 2024, the total public debt in naira terms was N121.67 trillion, up from N97.34 trillion in Q4 2023. The DMO noted that while the total external debt stock stayed almost flat in dollar terms, the naira value surged due to the devaluation.

The N7.71 trillion fresh borrowing combined with a N16.62 trillion increase from naira devaluation accounts for the total rise in Nigeria’s public debt.

The statement read: “The increase in Naira Terms of N24.33 trillion is being misinterpreted as New Borrowing. It represents new borrowing of N2.81 trillion as part of the N6.06 trillion domestic borrowing in the 2024 Appropriation Act, N4.90 trillion from the securitization of the N7.3 trillion Ways and Means Advances, and the depreciation of the naira from N899.39/$1 in Q4 2023 to N1,330.26/$1 in Q1 2024.

“While the total external debt stock was relatively flat at USD42.50 billion in Q4 2023 and USD42.12 billion in Q1 2024, the naira values differed significantly, being 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. The exchange rate difference also explains why, in dollar terms, the total debt stock declined from USD97.34 billion in Q4 2023 to USD91.46 billion in Q1 2024.”