In a startling revelation, the Director-General of the Debt Management Office (DMO), Patience Oniha, has disclosed that Nigeria’s total domestic debt stock has surged by 133.95% to N51.96 trillion as of the end of 2023. This surge is attributed to the Federal Government’s successful raising of N7.04 trillion in total new domestic borrowing throughout the year.
Speaking at the discussions for the establishment of the African Debt Managers Initiative Network in Abuja, Oniha expressed satisfaction with the achievement, stating, “I am happy to say that in 2023, the new domestic borrowing was N7.04 trillion, and as we speak that has been raised in full.”
Comparing this figure to the N3.5 trillion recorded the previous year, Oniha emphasized the growing debt appetite in the market, suggesting that “the market has debt for us to raise money.”
At the close of December 2022, Nigeria’s total domestic debt stood at N22.21 trillion. By the end of June 2023, this figure had skyrocketed to N48.32 trillion. The DMO explained that a significant contributor to this surge was the inclusion of the N22.71 trillion securitized Federal Government’s Ways and Means Advances, reflecting in domestic borrowings.
The Ratecaptain’s analysis indicates that total domestic borrowings, excluding the securitized Ways and Means Advances, would have been N25.60 trillion, representing a new domestic borrowing of N3.39 trillion. When combined with the government’s total domestic borrowing for 2023 (N7.04 trillion) and securitized Ways and Means Advances (N22.71 trillion), the total domestic debt reached N51.96 trillion.
Oniha addressed the composition of the debt, noting that various investors, including asset managers, fund managers, pension funds, insurance companies, and banks, participated in the securities issued. She highlighted the positive response in recent auctions, stating that “subscription levels have been good, and the rates have been very responsible below the monetary policy rate.”
Addressing the global market, Oniha acknowledged that foreign investors remained cautious due to uncertainty stemming from the Russia-Ukraine war. High inflation rates have contributed to elevated foreign market rates, pushing investors towards safer, higher-rated securities offering higher returns.
Despite challenges, Oniha suggested that market stability might be returning based on available data. She also commented on revenue challenges, emphasizing the need for increased revenue generation to reduce the country’s dependence on borrowing.
As of the second quarter of 2023, Nigeria’s total public debt reached N87.38 trillion, comprising both domestic and external debts of the Federal Government, states, and the Federal Capital Territory. Minister of Finance and Coordinating Minister for the Economy, Wale Edun, recently emphasized the importance of reducing borrowing, urging the country to focus on generating adequate revenues to alleviate the current high deficit financing.