Modest rise in the FGN’s domestic debt

The FGN’s domestic debt stock totaled N12.77trn (US$41.6bn) at end-December, equivalent to 10.0% of 2018 GDP. The increase of N480bn in the quarter consists largely of promissory notes for N330bn issued to settle arrears due to oil marketers and sub-nationals. Subject to verification by the National Assembly, pro-notes and bonds totaling a further N2.4trn will be issued to clear late payments to contractors, non-oil exporters and other creditors. The debt stock also increased in Q4 following the issue of the FGN’s second N100bn sukuk.


  • It is evident from our chart that the burden increased substantially in both 2016 and 2017. The growth has since slowed as a result of the FGN/DMO policy of externalization (deploying Eurobond sale proceeds to pay down Treasury bills).
  • The DMO data does not reflect any CBN financing of the FGN deficit.
  • It is said that the debt stock/GDP ratio, while popular with the ratings agencies and financial media, is of limited relevance because debt obligations are serviced by the government and not the broader economy. A more challenging ratio would be the proportion of FGN revenues required to service the debt (currently around 60%).


FGN domestic debt (N trn)

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


  • The domestic debt of the states increased from N3.53trn to N3.85trn in Q4.

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