Thursday, May 6th 2021 4:41 AM

Market Digest Nigeria


Federal Govt now owes domestic investors N15.8tr

The Federal Government is owing N15.85 trillion in domestic debts, with almost three-quarters of the debts due to bondholders.

The fixed-return debts place obligation on the government to make regular interest or coupon payment and redemption as at when due.

The latest breakdown of the national debts obtained at the weekend showed that the Federal Government owed domestic sovereign bondholders N11.65 trillion, 73.53 per cent of total domestic debts as at third quarter ended September 30, last year.

The report by the Debt Management Office (DMO), which oversees government’s debt issues, indicated that about 17.17 per cent or N2.72 trillion were due to domestic investors in Nigerian Treasury Bills (NTBs) while N100.99 billion or 0.64 per cent and N12.561 billion or 0.08 per cent were due to investors in Nigerian Treasury Bonds and FGN Savings Bonds.

Other domestic debts by the government included FGN Sukuk N362.557 billion or 2.29 per cent; Green Bonds, N25.69 billion or 0.16 per cent and Promissory Notes, N971.88 billion or 6.13 per cent.

On promissory note obligations, the Federal Government paid state governments N153.82 billion on December 28, 2020 while it is scheduled to pay another tranche of about N31.44 billion on February 18, 2021.

Also, on April 30, 2021, oil marketing firms will redeem N44.488 billion promissory notes from the government while state governments will redeem N277.896 billion.

On May 24, 2021, state governments will be paid N5.849 billion by the Federal Government in line with its promissory note obligations and on July 12, 2021, oil marketing firms will be paid N80.588 billion.

Other obligations included two tranches of N12.221 billion and N12.09 billion due to oil marketing firms from promissory note obligations of the Federal Government.

These domestic debt instruments form part of the N32.2 trillion debts of the Federal Government.

Nigeria’s debt stock rose by N1.21 trillion within three months to N32.223 trillion by the end of the third quarter ended September 30, 2020.

The DMO indicated that Nigeria’s debt stock grew by N1.214 trillion between June 2020 and end of September 2020.

According to the report, total public debt stock stood at N32.223 trillion or $84.574 billion. The debt stock was made up of domestic and external debt stocks of the Federal Government, the 36 state governments and the Federal Capital Territory (FCT).

Public debt figures showed that 37.82 per cent represented external debts while the balance of 62.18 per cent was domestic.

“Compared to the total public debt stock of N31.009 trillion as at June 30, 2020, the debt stock in third quarter 2020 increased by N1.214 trillion or 3.91 per cent. The FGN, State Governments and the FCT all recorded increases in their debt stock due to borrowings to enable them respond appropriately to the COVID-19 pandemic and to meet revenue shortfalls,” DMO stated.

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