As of March 31 , 2015 , the country ’ s total debt stood at N12 . 06 tn . This means the debt level increased by N7 .1 tn in two years.
Segmenting the national debt , the DMO put the Federal Government’ s domestic debt at N11 . 97 tn . Two years ago , as of March 31 , 2015 , this component of the debt burden stood at N8 .51 tn .
This means that within a period of two years , the Federal Government has borrowed a total of N3 . 46 tn from domestic creditors . This shows that the domestic debt of the Federal Government has increased by 40 . 71 per cent .
In the same period , the country ’ s external debt ( for the federal and state governments ) rose from $ 9 . 46 bn to $ 13 . 81 bn . This means that within the two- year period, the country ’ s external debt rose by $ 4 . 35 bn or 45 . 98 per cent .
The external debt component , however , has been affected by exchange rate variations as the last two years have witnessed noticeable changes in foreign exchange rates .
According to the DMO , the official exchange rate of N306 .35 to $ 1 was used in calculating the country ’ s external debt for March 31 , 2017 , while the official rate of N197 to $ 1 was used in determining the foreign debt for March 31 , 2015 .
The domestic debt component of the states stood at N2 . 96 tn as of March 31 , 2017 , up from the figure of N1 . 69 bn at the same time in 2015 .
This means that within the period of two years , the domestic debt of the states rose by N1 .27 tn or 75 . 15 per cent .
Amidst drying revenues from oil and gas , the government has in the last two years increasingly depended on borrowing even to carry out routine responsibilities .
Although foreign debts are accounted as cheaper than domestic debts , the government has increasingly depended on domestic sources of borrowing as foreign donors place more stringent conditions before granting credit facilities to the government .
To raise the required funds from the domestic debt market , the Federal Government has been active in the market with a number of instruments , including FGN Bonds and the Nigeria Treasury Bill. It recently floated a new instrument known as the FGN Savings Bond .
The International Monetary Fund had recently projected that Nigeria ’s indebtedness would climb to 24 .1 per cent of the nation ’ s Gross Domestic Product by 2018 . It said that the country ’ s current indebtedness would have reached 23 . 3 per cent of the GDP by the end of 2017 .
The country closed 2016 with a debt to GDP ratio of 18 . 6 per cent . By the end of 2015 , Nigeria ’s debt to GDP ratio stood at 12 . 1 per cent , according to the Bretton Wood institution .
Nigeria ’s GDP for the year ended December 31 , 2016 stood at N67 . 98 tn , according to the National Bureau of Statistics.
Going by the projection of 24 .1 per cent for 2018 , within three years , the nation ’ s debt to GDP ratio would have gone up by 100 per cent , from 12 .1 per cent in 2015 .
Although Nigeria ’ s debt to GDP ratio is considered among the lowest in Africa , some experts have expressed worries about the increase in debt accumulation in recent years , while others are worried about the quality and utilisation of the debts .
The World Bank recently expressed concern over the debt servicing to revenue ratio , saying that reduced earnings might render the country ’s debt unsustainable . A total of N1 . 84 tn was provided in the 2017 budget for debt servicing .
Nigeria ’s debt profile is dominated by local debts , which are characterised by high interest rates . Efforts are being made to secure more foreign debts and reduce the exposure of the Federal Government to the domestic debt market .
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