DEBT MANAGEMENT STRATEGY:
  • In 2015, the external debt management strategy of accessing funds from mainly the multilateral and bilateral sources on concessional terms was retained. The concessional debt formed 85.46 percent of the total external debt stock, as at end of December, 2015, while debt from nonconcessional sources was 14.54 percent compared to 83.0 percent and 17.0 percent in 2014, respectively. The domestic and external debt mix was 84:16 against the optimal target of 60:40, while the ratio of long-term to short-term domestic debt was 69:31 compared with the target of 75:25. The domestic debt management strategy focused on continued deepening of the market for government securities aimed at building up liquidity through the introduction of a variety of financial instruments. 
  • The goals of the Debt Management Strategy 2012-2015 was twofold, first the government aimed to reduce growth of public debt (more particulary the domestic debt) and to reduce the service in order to reach the optimal ratio of 60:40 between domestic and external debt and 75:25 between long-term and short-term debt. The government also wanted to ensure the stabilization and deepening of the domestic debt market, so as to attract inflow of foreign investments and making of direct budgetary provisions for creation of a sinking fund preparatory for the repayment of part of maturing principal FGN obligations.
Debt management and Bond market:
  • In 2015, the external debt management strategy continued to be focused on borrowing mainly from multilateral and bilateral sources on concessional terms, to finance public development programmes. However, with more emphasis on rebalancing the total debt portfolio so as to achieve the optimal debt portfolio mix of 60:40 between domestic and external debt.
  • The FGN Bond primary market remained active in 2015, with regular issuances of tradable securities. The issuance activities were targeted at increasing the volume of benchmark bonds in order to promote liquidity of the instruments, support trading in the market and meet the appetite of various investor groups. Consequently, there were re-openings of benchmark bonds at various times during the year. The FGN Bonds issued during the year were in the 5, 10, and 20-year tenors. The total amount offered was N858,220.00 million, while total subscriptions was N1,753,460.47 million, representing  over-subscription of 204.31 percent for the year compared to 193.09 percent in 2014. The total amount allotted was N998,740.00 million.
Total and external debt:
  • Total public debt outstanding as at end of December, 2015, was US$65,428.53 million compared to US$67,726.28 million as at end of December, 2014. The marginal increase was mainly in the domestic debt portfolio, which was attributed to additional issuances for the funding of the 2015 budget deficit and refinancing of matured debt securities. The domestic debt stock has continued to form a larger part of the total public debt stock since 2011. The stock of external debt continued to be in the long-term category. 
  • Nigeria’s external debt outstanding was US$10,718.43 million as at end of December, 2015. The composition showed that a higher proportion of external debt was from the Official Creditors (multilateral and bilateral) at concessional rates and this was essentially used to finance the development of projects and programmes in various sectors of the economy. The non-concessional loans were from the commercial creditors. The stock of the external debt by remaining maturity remained mostly long-term. The increase in the net inflow of funds was largely on account of additional disbursements from multilateral and bilateral creditors.

Trend in Public Debt 


​FGN’s Total Public Debt Service: The  FGN’s total debt service was US$5,499.24 million as at end of December, 2015 compared to US$5,500.35 million in 2014 (Table 3.3). The slight decrease of US$1.11 million or 0.02 percent in the total public debt service, was attributed to a decline in payment to external debt creditors. 

Trends in FGN’s Total Debt Service, 2011-2015

Debt Sustainability Analysis
  • The result of the 2015 DSA showed that relative to the output-based indicator (Debt-to-GDP ratio), Nigeria still remained at a low risk of debt distress, but remained mostly sensitive to revenue shocks. The Debt-to-GDP ratios were at sustainable levels during the period under review, even when various shocks were applied to the baseline scenario. However, all the solvency and liquidity indicators under the fiscal sustainability analysis showed that the debt portfolio was vulnerable to revenue shocks, especially when crude oil price was set below US$30 per barrel. This heightened the need to further strengthen and diversify the revenue base of the country for long-term debt sustainability.
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  • The result of the 2015 DSA exercise showed that the FGN’s external debt portfolio was at a very low level of risk and distress. The table below presents a four-year projected FGN external debt burden indicators, using the Baseline assumptions, and benchmarked against Nigeria’s peer group thresholds. The results also showed that all the indicators would remain below the thresholds throughout the projected period. 

 FGN’s External Debt Sustainability Indicators in Percent (2015 – 2035)

External Debt Sustainability Analysis of the FGN:
The results under the Pessimistic Scenario indicated that the country would be at risk of debt distress under a persistent deterioration in macroeconomic indicators and variables in the medium to long-term. The PV of Debt/Export, PV of Debt/Revenue and Debt Service/Revenue breached the peer group thresholds of 150 percent, 250 percent and 20 percent in year 2030, 2022 and 2025, respectively. 

FGN’s External Debt Sustainability Indicators in Percent (Pessimistic)

Data: