Public debt rises to N82 trillion after naira unification

Nigeria’s total public debt rose by fiat to N82 trillion following the unification of the naira. It was N73 trillion before the unification.

The central bank of Nigeria issued a press release titled Operational Changes to the Foreign Exchange Market, signaling a unification of the multiple exchange rates.

This is in line with the instruction of the president, Bola Ahmed Tinubu who first announced this as a policy change in his inauguration broadcast.

However, the implementation of the scheme which saw the exchange rate first depreciate to N662/$1 attracts several consequences for the economy one of which includes the automatic increase of the public debt.

Impact on Public Debt
Before now, the nation’s public debt was quoted at N448.50/$1 by the Debt Management Office as the official exchange rate but this has now been depreciated to N662/$1.

Nairametrics
Home Economy
Public debt rises to N82 trillion after naira unification
Cees HarmonbyCees Harmon 29 seconds ago
Public debt rises to N82 trillion after naira unification
President Bola Tinubu during a campaign rally

Nigeria’s total public debt rose by fiat to N82 trillion following the unification of the naira. It was N73 trillion before the unification.

The central bank of Nigeria issued a press release titled Operational Changes to the Foreign Exchange Market, signaling a unification of the multiple exchange rates.

This is in line with the instruction of the president, Bola Ahmed Tinubu who first announced this as a policy change in his inauguration broadcast.

However, the implementation of the scheme which saw the exchange rate first depreciate to N662/$1 attracts several consequences for the economy one of which includes the automatic increase of the public debt.

Nigeria’s Public Debt Profile.
Source: Nairametrics
Impact on Public Debt
Before now, the nation’s public debt was quoted at N448.50/$1 by the Debt Management Office as the official exchange rate but this has now been depreciated to N662/$1.

News continues after this ad

This means the total public debt increases from an estimated N79 trillion to N82 trillion.
The increase is due to the conversion of the dollar portion of the debt which is estimated at about $41.6 billion. When adjusted for the most recent exchange rate it converts to N27.6 trillion.
The naira portion of Nigeria’s public debt is about N54.3 trillion and it includes Ways and Means which Nairametrics estimates at about N26.8 trillion.
But while the naira portion of the loan increases the dollar value drops.

Other considerations
It is important to note that the actual obligations of the public debt do not change as Nigeria still needs to pay the debt of $41.6 billion in foreign currency and not in naira.

Thus the conversion is purely for the purposes of reporting.