Nigeria’s Largest Creditors As Of December 31st 2023

Next President To Inherit ₦77trn Debt - DMO

As of December 2023, Nigeria’s total national debt was estimated by the Debt Management Office (DMO) to be N97.34 trillion ($108.23 billion). Compared to N39.56 trillion ($95.77 billion) at the conclusion of the previous year, this amount represented a 146% growth.  

The inclusion of the CBN’s N20 trillion ($48 billion) in Ways and Means loans to the government and the approximately 60% devaluation of the naira are the main causes of the large increase.   

Both the federal and state governments have debts that are both local and international. Treasury bills, FGN securities, and, more recently, CBN’s Ways and Means comprise domestic debt. In the international arena, Nigeria has bilateral debts to nations like China, France, Germany, and Japan as well as multilateral organizations like the World Bank, International Monetary Fund (IMF), Islamic Development Bank (IsDB) and the African Development bank (AfDB).  

 Domestic Debt 

The federal and state government mostly borrows money by issuing bonds to the domestic market in the local currency, the naira. According to the data from the DMO, Nigeria’s total domestic debt is about N59.12 trillion out of which the states owe N5.86 trillion. The biggest sources of domestic debt as of December 2023 are FGN securities, making a total of N59.12 trillion, which make up 40% of Nigeria’s total debt.  

FGN Bonds N42.2 trillion (+169.5% YoY)  

  • These are long term bonds issues by the federal government and mostly used to finance the country’s budget deficit.  
  • Nigeria’s FGN Bonds increased 169.5% YoY mostly due to the addition of Ways and Means into the FGN Bonds.  
  • FGN Bonds are traded on the FMDQ, Nigeria’s official market for trading government securities. It is also traded on the NGX, Nigeria premier markets for stocks and bonds.  
  • Among the holders of Nigeria’s FGN Bonds include institutional investors, retail investors, foreign portfolio investors and domestic investors in general.  

Nigeria Treasury Bills N6.5 trillion (+47.5% YoY)  

  • These are short term securities issued by the government via the central bank. 
  • Treasury bills tenors are either 91 days, 182 days or 364 days attracting respective interest rates.  
  • The data reveals Nigeria has a total of N6.5 trillion in Treasury Bills as of December 2023 up from N4.4 trillion recorded same period 2022.  
  • Among the buyers of Nigeria’s Treasury bills are institutional investors, foreign portfolio investors and high net worth individuals.  

Promissory Notes N1.33 trillion (+150.8% YoY) 

  • Nigeria’s issuance of Promissory Notes increased by 150.8% year-over-year, reaching N1.33 trillion, indicating a robust utilization of this financial instrument. 
  • Nigerian government offer issue promissory notes to settle arrears, fund infrastructural projects and settle judgement debts. 
  • This year-over-year jump also underscores the government’s reliance on these instruments to potentially ease liquidity constraints, implying that there may be an increasing number of contractors, pensioners, or other entities to whom the government owes money. 

FGN Sukuk Fund N1.09 trillion (+47.1% YoY) 

  • FGN Sukuk Fund in Nigeria grows to N1.09 trillion, an increase of 47.1% compared to the previous year’s N742.56 billion.  
  • Sukuk bonds are usually used to funding for infrastructure projects like roads and bridges in the country.  
  • Funds raised by the DMO through the different Sukuks have been used to facilitate the construction and rehabilitation of over 4000 kilometers of roads and bridges in Nigeria. 

FGN Saving Bonds N39.18 billion (+42.4% YoY) 

  • Nigeria’s FGN Saving Bonds rise to N39.18 billion, an increase of 42.4% increase year-over-year. 
  • It reflects greater public investment in government-backed savings, and indicates confidence in federal savings instruments. 
  • The DMO offers savings bonds monthly to interested investors. 

 Foreign Debt 

The latest data as of December 2024, confirms Nigeria’s total external debt balance is $42.5 billion (N38.22 trillion), with states owing $4.61 billion (N4.15 trillion)  

Islamic Development Bank $238.17 million (+70.01% YoY) 

  • The Islamic Development Bank (IsDB) is a multilateral creditor. 
  • It has significantly increased its lending to $238.17 million as of December 23, marking a substantial year-over-year surge of 70.10% from the previous $140 million. 
  • This notable rise reflects the bank’s growing engagement and support for developmental projects within its member countries. 

Africa Growing Together Fund $23.35 million (+28.50% YoY) 

  • Under the multilateral category, the Africa Growing Together Fund is managed by the African Development Bank (AfDB) 
  • It saw a positive change as the fund’s contribution grew from $18.17 million to $23.35 million, an encouraging 28.50% increase year-over-year. 
  • This uptick signals an expanded commitment to fostering sustainable growth on the continent.   

Exim Bank of China $5.17 billion (+20.30% YoY) 

  • In the bilateral category, the Exim Bank of China continues to play a crucial role in financing development, with its loans rising to $5.17 billion, up by 20.30% from the previous year’s $4,293.63 million. 
  • This increase underscores the strengthening financial relationship between China and its partner nations, with a focus on long-term investments in infrastructure and development. 
  • Chinese loans have been used for critical infrastructures, especially in the transportation sectors. For instance, the loans have been used to fund a number of railway projects in Nigeria. 
  • China is owed the highest with about about 86.7% of the total owed to countries.  

International Development Association $14.96 billion (+11.30% YoY) 

  • The International Development Association (IDA) is a part of the World Bank Group. 
  • Classified under multilateral debt, it has increased its financial support to $14.96 billion, marking an 11.30% increase from $13.45 billion the previous year. 
  • The IDA’s consistent lending growth indicates sustained support for poverty reduction strategies and economic development programs. 

International Fund For Agricultural Development $277.4 million (+9.80% YoY) 

  • The International Fund For Agricultural Development (IFAD), also a multilateral entity, has a lending increase to $277.4 million, a 9.80% rise from $252.74 million. 
  • This increment demonstrates the IFAD’s ongoing commitment to agricultural development and rural poverty reduction, emphasizing the importance of the agricultural sector in driving economic progress and food security. 

What this means: Nigeria’s total public debt of about N97.34 trillion is about 42% of the country’s gross domestic product (GDP), which according to international standards is well within limits but above Nigeria’ self-imposed limit of 40%.  

  • More importantly, Nigeria is largely exposed to debts dominated in naira, with about 61% of the debts in local currency.  
  • This effectively means the Nigerian government has a moderate grasp and control over how it manages its domestic debts. It can, for example, be in an unlikely situation where it is unable to pay down local debts and when due, print more naira to meet this obligation.  
  • About 39% of the total value of debts are in foreign currency. Most of the debts are also medium to long-term Eurobonds and owed to diverse creditors. The DMO recently noted that a significant portion (63.79%) of its external debt is derived from loans from multilateral and bilateral lenders. These loans are primarily concessional or semi-concessional, indicating efforts to manage the debt burden effectively.  
  • While this is a manageable figure, it is more than Nigeria’s external reserves and is becoming expensive to service.  

Nigeria is not in any favorable position to take on more foreign debts at the current rates considering the state of government revenues and the devaluation of naira. However, to meet its large budget deficits, it is likely to keep borrowing, especially by issuing more FGN securities.

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