Nigeria spent N1.17 trillion in the third quarter of 2022 on paying off its domestic and foreign debt, a 27.9% increase from N912.7 billion in the second quarter.
This is based on the Debt Management Office’s release of Nigeria’s debt service report for Q3 2022.
According to the report’s breakdown, N346.43 billion (or $801.24 million) was spent on costs related to servicing foreign debt, while N820.59 billion was used to pay for domestic debts.
Nigeria’s total debt stock decreased from $103.31 billion in June 2022 to $101.91 billion as of the end of September 2022.
On the other hand, when expressed in local currency, the total debt stock increased to N44.06 trillion from N42.85 trillion as of the previous quarter. This is a result of the official market’s local currency depreciating against the US dollar.
According to data from the DMO, the official exchange rate declined from N414.72/$1 at the start of the review quarter to N432.37/$1 at the end of the quarter.
Breakdown of debt stock
- The total stock of external debt was $39.66 billion (N17.15 trillion).
- Domestic debt owed by the federal government was $49.85 billion, or N21.55 trillion.
- As of September 2022, states owed a total of $12.41 billion (N5.36 trillion) in domestic debt.
At the time of the review, the total domestic debt stock was $62.25 billion, or about N26.92 trillion in local currency.
The amount of domestic debt service in the third quarter of 2022 increased by 23.4% over the N664.73 billion recorded in the previous quarter, making it the highest amount ever. The cost of servicing external debt increased 34% from the $597.95 million reported in Q2 2022.
Further breakdown revealed that N248.72 billion was spent on domestic debt obligations in July, N152.44 billion in August, and N419.42 billion in September 2022. In addition, interest payments on Nigerian Treasury Bills cost N94.99 billion.
In addition, N685.61 billion was spent on interest on bonds issued by the federal government. In addition, N8.3 billion was spent on FGN Sukuk Bond rentals, N426.01 million on FGN Savings Bond interest, and N6.25 billion and N25 billion, respectively, on Treasury Bond interest and principal payments.
With a principal repayment of N25 billion, the total amount of domestic interest payments now stands at N795.59 billion.
Nigeria keeps taking on debt to cover its budget deficit as its revenue crisis persists. FG revenue between January and August 2022 was N4.233 trillion, according to Finance Minister Zainab Ahmed, while debt service costs were N3.52 trillion.
The federal government underperformed by 36.3% compared to the N6.65 trillion prorated budget for the period, bringing its total revenue to N4.23 trillion. Additionally, compared to the N5.49 trillion expected revenue, the federal retained revenue underperformed by 33.3%, coming in at N3.67 trillion instead.
