A headline change in the external debt profile

The FGN’s external debt obligations at end-March amounted to US$22.07bn, equivalent to 5.9% of 2017 GDP. This includes the external borrowings of the state governments, which are necessarily guaranteed by the FGN. The rise over the previous quarter was US$3.16bn, dominated by the Eurobond issue of US$2.50bn in February. We also note increases in exposure of US$490m to the World Bank Group and US$180m to the African Development Bank (AfDB) group. Nigeria’s traditional multilateral partners are still disbursing funds.


  • The headline change in the data this quarter is that ICM have replaced the World Bank Group as the leading external creditor. Nigeria has raised US$8.5bn in the Eurobond market since 2011, and the pace of issuance has accelerated due to the FGN/DMO policy of the externalization of debt.
  • That pace is expected to continue, given the projection in the 2018 budget of N849bn (US$2.78bn) for external financing of the FGN deficit.
  • There are several World Bank and AfDB project loans on the drawing board or close to disbursement. Nigeria, despite its middle-income status, is still able to borrow from the multilaterals although both agencies have shifted their focus away from budget support.

Sources: Debt Management Office (DMO); FBNQuest Capital Research


  • The maturities of the FGN’s Eurobonds do not exactly match those of its naira bond issuance. However, even allowing for the normalization of US monetary policy and related EM wobbles (negatives), and the success of externalization (positive), we can say that the rates in the middle and long end of the curve for its external borrowing are still at least 600bps cheaper. The differential three months ago was closer to 650bps.

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