According to the Debt Management Office (DMO), the outstanding public debt declined by 5.65 percent from $84 billion to $79.3 billion between December 2019 and March 20201. The reduction was driven by a 9 percent decline in domestic debt from $56.4 billion to $51.6 billion during the same period2. Meanwhile, the change to external debt was minimal as it tapered around $27.6 billion in both periods. While the decline in domestic debt is as a result of the redemption of Nigeria Treasury Bills (NTBs), the stagnation of external debt stems from the government’s need to limit its exposure to exchange rate volatility. However, the $3.4 billion in emergency support received from the IMF in April as well as the reliance on domestic debt to mitigate the impact of the pandemic will increase public debt in the near term. In this context, effective debt management is important not only with regards to the terms of borrowing but also in debt use and transparency.
July 20, 2020
Nigeria Economic Update (Issue 27)
Related
Nigeria Economic Update (Issue 5)
All Share Index (ASI) and Market
Capitalization declined by 13 percent to close at 23514.04 points and N8.09
trillion respectively at the end of the trade session on January 15.
The huge drop in the Index, representing a 3-year low, led to the introduction
of the Index Circuit Breakers Rule. While this policy measure may
prevent huge losses in the stock market, rising concerns about macroeconomic
stability in Nigeria may significantly increase the level of volatility in the
stock market. This may have substantial adverse implications for investors in
the Stock Exchange.