Nigeria’s Debt Management Office (DMO) reports that the federal government’s Promissory Notes debt surged to N1.65 trillion as of June 2024, marking a 6.5% increase from March 2024.
This form of domestic debt has seen a staggering 114% rise since President Bola Tinubu took office.
Promissory Notes, a debt instrument that includes a written commitment by the issuer (in this case, the government) to repay a specific amount, have become a primary mechanism for the federal government to meet obligations it cannot fund immediately with revenue or cash.
This sharp rise highlights the government’s growing reliance on Promissory Notes for financial commitments.
The DMO’s 2024 half-year public debt report reveals that Nigeria’s domestic and foreign public debt rose to N71.2 trillion and $42.9 billion, respectively.
Naijaonpoint reported in January that the government struggled to redeem its Promissory Notes after it ceased relying on central bank funding through Ways and Means.
A Central Bank of Nigeria report cited by Naijaonpoint attributed the spike in Promissory Notes, as of December 2023, to incentives owed to exporters under the Export Expansion Grant (EEG) scheme, obligations that predate the Tinubu administration.
While specific reasons for the N342.6 billion rise in Promissory Notes in 2024 were not detailed, Naijaonpoint’ research suggests it may be linked to outstanding debts to government contractors, suppliers, and oil marketers.
Fiscal Deficit escalates
A recent report from Naijaonpoint highlights that Nigeria’s budget deficit reached 7.6% of GDP as of August 2024, overshooting the approved 3.8% target for the year.
The federal government has announced a proposed budget of N47.9 trillion for 2025. Atiku Bagudu, Minister of Budget and Economic Planning, shared this update after a Federal Executive Council (FEC) meeting chaired by President Tinubu.
The 2025 budgetary framework will be critical in shaping the economic trajectory under the Tinubu administration.